Here's Why Shareholders May Want To Be Cautious With Increasing Alcidion Group Limited's (ASX:ALC) CEO Pay Packet
Key Insights
Alcidion Group to hold its Annual General Meeting on 20th of November
Salary of AU$472.9k is part of CEO Kate Quirke's total remuneration
The overall pay is comparable to the industry average
Alcidion Group's three-year loss to shareholders was 61% while its EPS grew by 7.6% over the past three years
Shareholders of Alcidion Group Limited (ASX:ALC) will have been dismayed by the negative share price return over the last three years. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 20th of November. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.
View our latest analysis for Alcidion Group
How Does Total Compensation For Kate Quirke Compare With Other Companies In The Industry?
Our data indicates that Alcidion Group Limited has a market capitalization of AU$94m, and total annual CEO compensation was reported as AU$708k for the year to June 2023. Notably, that's an increase of 16% over the year before. Notably, the salary which is AU$472.9k, represents most of the total compensation being paid.
For comparison, other companies in the Australian Healthcare Services industry with market capitalizations below AU$314m, reported a median total CEO compensation of AU$583k. This suggests that Alcidion Group remunerates its CEO largely in line with the industry average. What's more, Kate Quirke holds AU$3.4m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2023 | 2022 | Proportion (2023) |
Salary | AU$473k | AU$398k | 67% |
Other | AU$235k | AU$212k | 33% |
Total Compensation | AU$708k | AU$611k | 100% |
On an industry level, roughly 57% of total compensation represents salary and 43% is other remuneration. Alcidion Group is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Alcidion Group Limited's Growth
Alcidion Group Limited's earnings per share (EPS) grew 7.6% per year over the last three years. In the last year, its revenue is up 18%.
We think the revenue growth is good. And the modest growth in EPS isn't bad, either. So while performance isn't amazing, we think it really does seem quite respectable. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Alcidion Group Limited Been A Good Investment?
With a total shareholder return of -61% over three years, Alcidion Group Limited shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Alcidion Group that you should be aware of before investing.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
