Shareholders Will Most Likely Find Apollo Consolidated Limited's (ASX:AOP) CEO Compensation Acceptable
Despite strong share price growth of 261% for Apollo Consolidated Limited (ASX:AOP) over the last few years, earnings growth has been disappointing, which suggests something is amiss. The upcoming AGM on 18 November 2021 may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.
View our latest analysis for Apollo Consolidated
How Does Total Compensation For Nick Castleden Compare With Other Companies In The Industry?
At the time of writing, our data shows that Apollo Consolidated Limited has a market capitalization of AU$187m, and reported total annual CEO compensation of AU$307k for the year to June 2021. This means that the compensation hasn't changed much from last year. Notably, the salary which is AU$265.0k, represents most of the total compensation being paid.
On comparing similar-sized companies in the industry with market capitalizations below AU$272m, we found that the median total CEO compensation was AU$354k. So it looks like Apollo Consolidated compensates Nick Castleden in line with the median for the industry.
Component | 2021 | 2020 | Proportion (2021) |
Salary | AU$265k | AU$266k | 86% |
Other | AU$42k | AU$36k | 14% |
Total Compensation | AU$307k | AU$302k | 100% |
Speaking on an industry level, nearly 59% of total compensation represents salary, while the remainder of 41% is other remuneration. It's interesting to note that Apollo Consolidated pays out a greater portion of remuneration through salary, compared to the industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Apollo Consolidated Limited's Growth
Over the last three years, Apollo Consolidated Limited has shrunk its earnings per share by 58% per year. In the last year, its revenue is down 62%.
Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Apollo Consolidated Limited Been A Good Investment?
Boasting a total shareholder return of 261% over three years, Apollo Consolidated Limited has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
To Conclude...
Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean returns may be hard to keep up. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 4 warning signs (and 2 which don't sit too well with us) in Apollo Consolidated we think you should know about.
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. 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.
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