U.S. markets open in 7 hours 58 minutes

Does Acrux Limited's (ASX:ACR) CEO Pay Reflect Performance?

Simply Wall St

Michael Kotsanis has been the CEO of Acrux Limited (ASX:ACR) since 2014. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Acrux

How Does Michael Kotsanis's Compensation Compare With Similar Sized Companies?

Our data indicates that Acrux Limited is worth AU$22m, and total annual CEO compensation was reported as AU$521k for the year to June 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$451k. We looked at a group of companies with market capitalizations under AU$318m, and the median CEO total compensation was AU$403k.

So Michael Kotsanis receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

You can see, below, how CEO compensation at Acrux has changed over time.

ASX:ACR CEO Compensation, March 13th 2020

Is Acrux Limited Growing?

Acrux Limited has reduced its earnings per share by an average of 50% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 1.4% over the last year.

Sadly for shareholders, earnings per share are actually down, over three years. The fairly low revenue growth fails to impress given that the earnings per share is down. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Acrux Limited Been A Good Investment?

Given the total loss of 62% over three years, many shareholders in Acrux Limited are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

Remuneration for Michael Kotsanis is close enough to the median pay for a CEO of a similar sized company .

Returns have been disappointing and the company is not growing its earnings per share. Few would argue that it's wise for the company to pay any more, before returns improve. CEO compensation is an important area to keep your eyes on, but we've also identified 4 warning signs for Acrux (1 can't be ignored!) that you should be aware of before investing here.

If you want to buy a stock that is better than Acrux, this free list of high return, low debt companies is a great place to look.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.