Ashley Services Group Limited's (ASX:ASH) CEO Looks Like They Deserve Their Pay Packet

We have been pretty impressed with the performance at Ashley Services Group Limited (ASX:ASH) recently and CEO Ross Shrimpton deserves a mention for their role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 04 November 2021. 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.

View our latest analysis for Ashley Services Group

Comparing Ashley Services Group Limited's CEO Compensation With the industry

At the time of writing, our data shows that Ashley Services Group Limited has a market capitalization of AU$82m, and reported total annual CEO compensation of AU$450k for the year to July 2021. There was no change in the compensation compared to last year. In particular, the salary of AU$428.3k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations under AU$265m, the reported median total CEO compensation was AU$362k. From this we gather that Ross Shrimpton is paid around the median for CEOs in the industry. Furthermore, Ross Shrimpton directly owns AU$46m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2021	2020	Proportion (2021)
Salary	AU$428k	AU$429k	95%
Other	AU$22k	AU$21k	5%
Total Compensation	AU$450k	AU$450k	100%

Speaking on an industry level, nearly 79% of total compensation represents salary, while the remainder of 21% is other remuneration. Ashley Services Group pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Ashley Services Group Limited's Growth

Over the past three years, Ashley Services Group Limited has seen its earnings per share (EPS) grow by 24% per year. Its revenue is up 14% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Ashley Services Group Limited Been A Good Investment?

Most shareholders would probably be pleased with Ashley Services Group Limited for providing a total return of 157% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

Ashley Services Group pays its CEO a majority of compensation through a salary. Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

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 3 warning signs for Ashley Services Group (1 is a bit concerning!) that you should be aware of before investing here.

Switching gears from Ashley Services 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.

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.

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