Shareholders May Find It Hard To Justify Increasing Academies Australasia Group Limited's (ASX:AKG) CEO Compensation For Now

Key Insights

• Academies Australasia Group to hold its Annual General Meeting on 17th of November
• Salary of AU$512.0k is part of CEO Christopher Campbell's total remuneration
• The overall pay is comparable to the industry average
• Academies Australasia Group's EPS declined by 95% over the past three years while total shareholder loss over the past three years was 24%

Shareholders of Academies Australasia Group Limited (ASX:AKG) will have been dismayed by the negative share price return over the last three years. In addition, the company's per-share earnings growth is not looking good, despite growing revenues. The AGM coming up on 17th of November will be an opportunity for shareholders to have their concerns addressed by the board and for them to exercise their influence on management through voting on resolutions such as executive remuneration. Here's why we think shareholders should hold off on a raise for the CEO at the moment.

View our latest analysis for Academies Australasia Group

How Does Total Compensation For Christopher Campbell Compare With Other Companies In The Industry?

Our data indicates that Academies Australasia Group Limited has a market capitalization of AU$34m, and total annual CEO compensation was reported as AU$540k for the year to June 2023. This was the same amount the CEO received in the prior year. We note that the salary portion, which stands at AU$512.0k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the Australian Consumer Services industry with market capitalizations below AU$315m, we found that the median total CEO compensation was AU$495k. From this we gather that Christopher Campbell is paid around the median for CEOs in the industry. What's more, Christopher Campbell holds AU$5.2m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	AU$512k	AU$512k	95%
Other	AU$28k	AU$28k	5%
Total Compensation	AU$540k	AU$540k	100%

On an industry level, roughly 65% of total compensation represents salary and 35% is other remuneration. Academies Australasia Group pays out 95% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Academies Australasia Group Limited's Growth

Over the last three years, Academies Australasia Group Limited has shrunk its earnings per share by 95% per year. In the last year, its revenue is up 29%.

The reduction in EPS, over three years, is arguably concerning. On the other hand, the strong revenue growth suggests the business is growing. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. 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 Academies Australasia Group Limited Been A Good Investment?

Given the total shareholder loss of 24% over three years, many shareholders in Academies Australasia Group Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

The company's earnings haven't grown and possibly because of that, the stock has performed poorly, resulting in a loss for the company's shareholders. Shareholders will get the chance at the upcoming AGM to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 3 warning signs for Academies Australasia Group (of which 1 is potentially serious!) that you should know about in order to have a holistic understanding of the stock.

Important note: Academies Australasia Group is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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.