David Budge has been the CEO of Aurora Labs Limited (ASX:A3D) since 2014. 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. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does David Budge's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Aurora Labs Limited has a market cap of AU$19m, and reported total annual CEO compensation of AU$301k for the year to June 2019. While we always look at total compensation first, we note that the salary component is less, at AU$250k. We took a group of companies with market capitalizations below AU$290m, and calculated the median CEO total compensation to be AU$378k.
That means David Budge receives fairly typical remuneration for the CEO of a company that size. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
You can see a visual representation of the CEO compensation at Aurora Labs, below.
Is Aurora Labs Limited Growing?
Over the last three years Aurora Labs Limited has shrunk its earnings per share by an average of 45% per year (measured with a line of best fit). Its revenue is up 173% over last year.
Investors should note that, over three years, earnings per share are down. On the other hand, the strong revenue growth suggests the business is growing. It's hard to reach a conclusion about business performance right now. This may be one to watch. Although we don't have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Aurora Labs Limited Been A Good Investment?
With a three year total loss of 94%, Aurora Labs Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
Remuneration for David Budge is close enough to the median pay for a CEO of a similar sized company .
The company cannot boast particularly strong per share growth. And shareholder returns have been disappointing over the last three years. So many would argue that the CEO is certainly not underpaid. Whatever your view on compensation, you might want to check if insiders are buying or selling Aurora Labs shares (free trial).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
If you spot an error that warrants correction, please contact the editor at email@example.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.
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