In 2015 Nick Waterworth was appointed CEO of Ambition Group Limited (ASX:AMB). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. 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.
How Does Nick Waterworth's Compensation Compare With Similar Sized Companies?
According to our data, Ambition Group Limited has a market capitalization of AU$5.9m, and paid its CEO total annual compensation worth AU$345k over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$310k. We looked at a group of companies with market capitalizations under AU$291m, and the median CEO total compensation was AU$379k.
So Nick Waterworth is paid around the average of the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
You can see a visual representation of the CEO compensation at Ambition Group, below.
Is Ambition Group Limited Growing?
Ambition Group Limited has reduced its earnings per share by an average of 102% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 6.5%.
Unfortunately, earnings per share have trended lower over the last three years. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Ambition Group Limited Been A Good Investment?
Given the total loss of 43% over three years, many shareholders in Ambition Group Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
Nick Waterworth is paid around the same as most CEOs of similar size companies.
The company isn't growing EPS, and shareholder returns have been disappointing. Few would argue that it's wise for the company to pay any more, before returns improve. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Ambition Group (free visualization of insider trades).
If you want to buy a stock that is better than Ambition Group, 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 firstname.lastname@example.org. 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.