It May Be Possible That Auswide Bank Ltd's (ASX:ABA) CEO Compensation Could Get Bumped Up

Shareholders will be pleased by the robust performance of Auswide Bank Ltd (ASX:ABA) recently and this will be kept in mind in the upcoming AGM on 23 November 2022. They will probably be more interested in hearing the board discuss future initiatives to further improve the business as they vote on resolutions such as executive remuneration. We have prepared some analysis below and we show why we think CEO compensation looks decent with even the possibility for a raise.

Check out the opportunities and risks within the AU Mortgage industry.

How Does Total Compensation For Martin Barrett Compare With Other Companies In The Industry?

Our data indicates that Auswide Bank Ltd has a market capitalization of AU$250m, and total annual CEO compensation was reported as AU$884k for the year to June 2022. That's a notable increase of 11% on last year. In particular, the salary of AU$606.2k, makes up a huge portion of the total compensation being paid to the CEO.

On examining similar-sized companies in the industry with market capitalizations between AU$148m and AU$590m, we discovered that the median CEO total compensation of that group was AU$1.6m. That is to say, Martin Barrett is paid under the industry median. Furthermore, Martin Barrett directly owns AU$1.8m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2022	2021	Proportion (2022)
Salary	AU$606k	AU$589k	69%
Other	AU$278k	AU$206k	31%
Total Compensation	AU$884k	AU$795k	100%

On an industry level, around 54% of total compensation represents salary and 46% is other remuneration. Auswide Bank pays out 69% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Auswide Bank Ltd's Growth

Auswide Bank Ltd's earnings per share (EPS) grew 12% per year over the last three years. Its revenue is up 8.2% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Auswide Bank Ltd Been A Good Investment?

With a total shareholder return of 13% over three years, Auswide Bank Ltd shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

The company's overall performance, while not bad, could be better. If it manages to keep up the current streak, CEO remuneration could well be one of shareholders' least concerns. Rather, investors would more likely want to engage on discussions related to key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 3 warning signs for Auswide Bank you should be aware of, and 1 of them can't be ignored.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.