We Think Shareholders Are Less Likely To Approve A Pay Rise For Ai-Media Technologies Limited's (ASX:AIM) CEO For Now

Key Insights

• Ai-Media Technologies will host its Annual General Meeting on 26th of October
• Salary of AU$332.9k is part of CEO Tony Abrahams's total remuneration
• The total compensation is similar to the average for the industry
• Ai-Media Technologies' three-year loss to shareholders was 74% while its EPS grew by 78% over the past three years

Shareholders of Ai-Media Technologies Limited (ASX:AIM) will have been dismayed by the negative share price return over the last three years. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 26th of October. They could also influence management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Ai-Media Technologies

How Does Total Compensation For Tony Abrahams Compare With Other Companies In The Industry?

At the time of writing, our data shows that Ai-Media Technologies Limited has a market capitalization of AU$60m, and reported total annual CEO compensation of AU$368k for the year to June 2023. That's a modest increase of 6.1% on the prior year. In particular, the salary of AU$332.9k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Australian Commercial Services industry with market capitalizations below AU$317m, reported a median total CEO compensation of AU$443k. From this we gather that Tony Abrahams is paid around the median for CEOs in the industry. Moreover, Tony Abrahams also holds AU$8.6m worth of Ai-Media Technologies stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	AU$333k	AU$322k	91%
Other	AU$35k	AU$25k	9%
Total Compensation	AU$368k	AU$347k	100%

On an industry level, roughly 70% of total compensation represents salary and 30% is other remuneration. Ai-Media Technologies is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Ai-Media Technologies Limited's Growth

Ai-Media Technologies Limited's earnings per share (EPS) grew 78% per year over the last three years. It achieved revenue growth of 3.5% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 Ai-Media Technologies Limited Been A Good Investment?

With a total shareholder return of -74% over three years, Ai-Media Technologies Limited shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. 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. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Ai-Media Technologies that you should be aware of before investing.

Switching gears from Ai-Media Technologies, 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.