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Graeme Drew is the CEO of AusQuest Limited (ASX:AQD), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for AusQuest.
Comparing AusQuest Limited's CEO Compensation With the industry
According to our data, AusQuest Limited has a market capitalization of AU$20m, and paid its CEO total annual compensation worth AU$219k over the year to June 2020. That's mostly flat as compared to the prior year's compensation. In particular, the salary of AU$200.0k, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the industry with market capitalizations under AU$278m, the reported median total CEO compensation was AU$302k. This suggests that AusQuest remunerates its CEO largely in line with the industry average. What's more, Graeme Drew holds AU$508k worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
On an industry level, roughly 68% of total compensation represents salary and 32% is other remuneration. AusQuest is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
AusQuest Limited's Growth
AusQuest Limited has seen its earnings per share (EPS) increase by 12% a year over the past three years. In the last year, its revenue is down 44%.
Shareholders would be glad to know that the company has improved itself over the last few years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has AusQuest Limited Been A Good Investment?
We think that the total shareholder return of 76%, over three years, would leave most AusQuest Limited shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
As we touched on above, AusQuest Limited is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. The company is growing EPS and total shareholder returns have been pleasing. Although the pay is close to the industry median, overall performance is excellent, so we don't think the CEO is paid too generously. Stockholders might even be okay with a bump in pay, seeing as how investor returns have been so strong.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 5 warning signs for AusQuest you should be aware of, and 2 of them are a bit concerning.
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.
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. 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.
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