Paul Niardone has been the CEO of The Agency Group Australia Limited (ASX:AU1) since 2016, and this article will examine the executive's compensation 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 Agency Group Australia.
Comparing The Agency Group Australia Limited's CEO Compensation With the industry
According to our data, The Agency Group Australia Limited has a market capitalization of AU$12m, and paid its CEO total annual compensation worth AU$361k over the year to June 2020. That's a notable decrease of 23% on last year. Notably, the salary which is AU$315.0k, represents most of the total compensation being paid.
In comparison with other companies in the industry with market capitalizations under AU$275m, the reported median total CEO compensation was AU$475k. This suggests that Agency Group Australia remunerates its CEO largely in line with the industry average.
Speaking on an industry level, nearly 79% of total compensation represents salary, while the remainder of 21% is other remuneration. Agency Group Australia is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
The Agency Group Australia Limited's Growth
Over the past three years, The Agency Group Australia Limited has seen its earnings per share (EPS) grow by 37% per year. It achieved revenue growth of 50% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has The Agency Group Australia Limited Been A Good Investment?
Since shareholders would have lost about 89% over three years, some The Agency Group Australia Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
As we touched on above, The Agency Group Australia 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. On the other hand, the company has logged negative shareholder returns over the previous three years. But EPS growth is moving in a favorable direction, certainly a positive sign. Overall, we wouldn't say Paul is paid an unjustified compensation, but shareholders might not favor a raise before shareholder returns show a positive trend.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 3 warning signs for Agency Group Australia that investors should think about before committing capital to this stock.
Important note: Agency Group Australia is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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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