It Looks Like Shareholders Would Probably Approve Acrow Formwork and Construction Services Limited's (ASX:ACF) CEO Compensation Package

It would be hard to discount the role that CEO Steven Boland has played in delivering the impressive results at Acrow Formwork and Construction Services Limited (ASX:ACF) recently. Shareholders will have this at the front of their minds in the upcoming AGM on 15 November 2022. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.

Our analysis indicates that ACF is potentially undervalued!

Comparing Acrow Formwork and Construction Services Limited's CEO Compensation With The Industry

According to our data, Acrow Formwork and Construction Services Limited has a market capitalization of AU$135m, and paid its CEO total annual compensation worth AU$987k over the year to June 2022. That's a notable decrease of 36% on last year. In particular, the salary of AU$530.0k, makes up a fairly large portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the industry with market capitalizations below AU$309m, we found that the median total CEO compensation was AU$874k. So it looks like Acrow Formwork and Construction Services compensates Steven Boland in line with the median for the industry. Moreover, Steven Boland also holds AU$2.8m worth of Acrow Formwork and Construction Services stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2022	2021	Proportion (2022)
Salary	AU$530k	AU$530k	54%
Other	AU$457k	AU$1.0m	46%
Total Compensation	AU$987k	AU$1.5m	100%

On an industry level, around 52% of total compensation represents salary and 48% is other remuneration. Acrow Formwork and Construction Services is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Acrow Formwork and Construction Services Limited's Growth

Over the past three years, Acrow Formwork and Construction Services Limited has seen its earnings per share (EPS) grow by 28% per year. Its revenue is up 49% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Acrow Formwork and Construction Services Limited Been A Good Investment?

Most shareholders would probably be pleased with Acrow Formwork and Construction Services Limited for providing a total return of 90% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

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 identified 4 warning signs for Acrow Formwork and Construction Services (1 is significant!) that you should be aware of before investing here.

Important note: Acrow Formwork and Construction Services is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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.