Ross Shrimpton became the CEO of Ashley Services Group Limited (ASX:ASH) in 2017, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Ashley Services Group.
How Does Total Compensation For Ross Shrimpton Compare With Other Companies In The Industry?
At the time of writing, our data shows that Ashley Services Group Limited has a market capitalization of AU$56m, and reported total annual CEO compensation of AU$450k for the year to July 2020. That's just a smallish increase of 5.9% on last year. Notably, the salary which is AU$429.0k, represents most of the total compensation being paid.
In comparison with other companies in the industry with market capitalizations under AU$259m, the reported median total CEO compensation was AU$443k. From this we gather that Ross Shrimpton is paid around the median for CEOs in the industry. What's more, Ross Shrimpton holds AU$33m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
On an industry level, roughly 70% of total compensation represents salary and 30% is other remuneration. Ashley Services Group has gone down a largely traditional route, paying Ross Shrimpton a high salary, giving it preference over non-salary benefits. 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
Ashley Services Group Limited's earnings per share (EPS) grew 57% per year over the last three years. It achieved revenue growth of 17% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. 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 187% 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.
Ashley Services Group pays its CEO a majority of compensation through a salary. As previously discussed, Ross is compensated close to the median for companies of its size, and which belong to the same industry. The company is growing EPS and total shareholder returns have been pleasing. So one could argue that CEO compensation is quite modest, if you consider company performance! Stockholders might even be okay with a bump in pay, seeing as how investor returns have been so strong.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 2 warning signs for Ashley Services Group that investors should be aware of in a dynamic business environment.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
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This article by Simply Wall St is general in nature. 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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