Is Ashley Services Group Limited’s (ASX:ASH) CEO Salary Justified?

In 2017 Ross Shrimpton was appointed CEO of Ashley Services Group Limited (ASX:ASH). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Ashley Services Group

How Does Ross Shrimpton’s Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Ashley Services Group Limited has a market cap of AU$48m, and reported total annual CEO compensation of AU$425k for the year to June 2019. Notably, that’s an increase of 42% over the year before. Notably, the salary of AU$404k is the vast majority of the CEO compensation. We looked at a group of companies with market capitalizations under AU$291m, and the median CEO total compensation was AU$378k.

So Ross Shrimpton receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance. 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.

The graphic below shows how CEO compensation at Ashley Services Group has changed from year to year.

ASX:ASH CEO Compensation, November 8th 2019
ASX:ASH CEO Compensation, November 8th 2019

Is Ashley Services Group Limited Growing?

On average over the last three years, Ashley Services Group Limited has grown earnings per share (EPS) by 139% each year (using a line of best fit). In the last year, its revenue is down 14%.

This demonstrates that the company has been improving recently. A good result. The lack of revenue growth isn’t ideal, but it is the bottom line that counts most in business.

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 207% 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.

In Summary…

Remuneration for Ross Shrimpton is close enough to the median pay for a CEO of a similar sized company .

Shareholders would surely be happy to see that shareholder returns have been great, and the earnings per share are up. So one could argue the CEO compensation is quite modest, if you consider company performance! Shareholders may want to check for free if Ashley Services Group insiders are buying or selling shares.

Important note: Ashley Services Group may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.