Ross Murdoch has been the CEO of Avecho Biotechnology Limited (ASX:AVE) since 2015. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Ross Murdoch's Compensation Compare With Similar Sized Companies?
Our data indicates that Avecho Biotechnology Limited is worth AU$7.9m, and total annual CEO compensation was reported as AU$404k for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at AU$351k. We examined a group of similar sized companies, with market capitalizations of below AU$289m. The median CEO total compensation in that group is AU$379k.
So Ross Murdoch receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see a visual representation of the CEO compensation at Avecho Biotechnology, below.
Is Avecho Biotechnology Limited Growing?
On average over the last three years, Avecho Biotechnology Limited has grown earnings per share (EPS) by 65% each year (using a line of best fit). It achieved revenue growth of 310% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Although we don't have analyst forecasts shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Avecho Biotechnology Limited Been A Good Investment?
With a three year total loss of 80%, Avecho Biotechnology Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
Ross Murdoch is paid around what is normal the leaders of comparable size companies.
We think that the EPS growth is very pleasing, but we find the returns over the last three years to be lacking. We'd be surprised if shareholders want to see a pay rise for the CEO, but we'd stop short of calling their pay too generous. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Avecho Biotechnology (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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