It's Probably Less Likely That AJ Lucas Group Limited's (ASX:AJL) CEO Will See A Huge Pay Rise This Year

Shareholders of AJ Lucas Group Limited (ASX:AJL) will have been dismayed by the negative share price return over the last three years. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 09 November 2022. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

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

How Does Total Compensation For Brett Tredinnick Compare With Other Companies In The Industry?

According to our data, AJ Lucas Group Limited has a market capitalization of AU$50m, and paid its CEO total annual compensation worth AU$647k over the year to June 2022. We note that's an increase of 17% above last year. Notably, the salary which is AU$528.4k, represents most of the total compensation being paid.

On comparing similar-sized companies in the industry with market capitalizations below AU$312m, we found that the median total CEO compensation was AU$598k. So it looks like AJ Lucas Group compensates Brett Tredinnick in line with the median for the industry.

Component	2022	2021	Proportion (2022)
Salary	AU$528k	AU$509k	82%
Other	AU$119k	AU$45k	18%
Total Compensation	AU$647k	AU$555k	100%

Speaking on an industry level, nearly 68% of total compensation represents salary, while the remainder of 32% is other remuneration. AJ Lucas Group is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at AJ Lucas Group Limited's Growth Numbers

Over the past three years, AJ Lucas Group Limited has seen its earnings per share (EPS) grow by 70% per year. In the last year, its revenue is up 11%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. 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 AJ Lucas Group Limited Been A Good Investment?

Few AJ Lucas Group Limited shareholders would feel satisfied with the return of -59% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 3 warning signs for AJ Lucas Group (of which 1 is concerning!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from AJ Lucas Group, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.