Geoff Acton has been the CEO of Advance NanoTek Limited (ASX:ANO) since 2017. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Geoff Acton's Compensation Compare With Similar Sized Companies?
Our data indicates that Advance NanoTek Limited is worth AU$364m, and total annual CEO compensation was reported as AU$679k for the year to June 2019. That's a notable increase of 47% on last year. We think total compensation is more important but we note that the CEO salary is lower, at AU$150k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. When we examined a selection of companies with market caps ranging from AU$147m to AU$587m, we found the median CEO total compensation was AU$682k.
So Geoff Acton is paid around the average of the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
You can see a visual representation of the CEO compensation at Advance NanoTek, below.
Is Advance NanoTek Limited Growing?
Advance NanoTek Limited has increased its earnings per share (EPS) by an average of 114% a year, over the last three years (using a line of best fit). Its revenue is up 83% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. 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 Advance NanoTek Limited Been A Good Investment?
Boasting a total shareholder return of 1965% over three years, Advance NanoTek Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Geoff Acton is paid around what is normal the leaders of comparable size companies.
Shareholders would surely be happy to see that shareholder returns have been great, and the earnings per share are up. Indeed, many might consider the pay rather modest, given the solid company performance! So you may want to check if insiders are buying Advance NanoTek shares with their own money (free access).
Important note: Advance NanoTek may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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