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Should You Worry About Allegra Orthopaedics Limited's (ASX:AMT) CEO Pay Cheque?

Simply Wall St

Jenny Swain became the CEO of Allegra Orthopaedics Limited (ASX:AMT) in 2016. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Allegra Orthopaedics

How Does Jenny Swain's Compensation Compare With Similar Sized Companies?

According to our data, Allegra Orthopaedics Limited has a market capitalization of AU$11m, and paid its CEO total annual compensation worth AU$333k over the year to June 2019. That's actually a decrease on the year before. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$282k. We looked at a group of companies with market capitalizations under AU$296m, and the median CEO total compensation was AU$381k.

That means Jenny Swain receives fairly typical remuneration for the CEO of a company that size. 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 Allegra Orthopaedics, below.

ASX:AMT CEO Compensation, October 17th 2019

Is Allegra Orthopaedics Limited Growing?

Over the last three years Allegra Orthopaedics Limited has grown its earnings per share (EPS) by an average of 38% per year (using a line of best fit). It saw its revenue drop 2.4% over the last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. Revenue growth is a real positive for growth, but ultimately profits are more important. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Allegra Orthopaedics Limited Been A Good Investment?

Given the total loss of 16% over three years, many shareholders in Allegra Orthopaedics Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Jenny Swain is paid around what is normal the leaders of comparable size companies.

We like that the company is growing EPS, but we cannot say the same about the lacklustre shareholder returns (over the last three years). 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. Shareholders may want to check for free if Allegra Orthopaedics insiders are buying or selling shares.

Important note: Allegra Orthopaedics 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.