Here's Why Shareholders Will Not Be Complaining About Aristocrat Leisure Limited's (ASX:ALL) CEO Pay Packet

Key Insights

• Aristocrat Leisure's Annual General Meeting to take place on 20th of February
• Salary of AU$2.13m is part of CEO Trevor Croker's total remuneration
• The total compensation is similar to the average for the industry
• Over the past three years, Aristocrat Leisure's EPS grew by 17% and over the past three years, the total shareholder return was 91%

The performance at Aristocrat Leisure Limited (ASX:ALL) has been quite strong recently and CEO Trevor Croker has played a role in it. Coming up to the next AGM on 20th of February, shareholders would be keeping this in mind. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. Here is our take on why we think CEO compensation is not extravagant.

See our latest analysis for Aristocrat Leisure

How Does Total Compensation For Trevor Croker Compare With Other Companies In The Industry?

At the time of writing, our data shows that Aristocrat Leisure Limited has a market capitalization of AU$47b, and reported total annual CEO compensation of AU$9.5m for the year to September 2024. That's a fairly small increase of 3.7% over the previous year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at AU$2.1m.

On comparing similar companies in the Australian Hospitality industry with market capitalizations above AU$13b, we found that the median total CEO compensation was AU$11m. This suggests that Aristocrat Leisure remunerates its CEO largely in line with the industry average. Moreover, Trevor Croker also holds AU$51m worth of Aristocrat Leisure stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, around 56% of total compensation represents salary and 44% is other remuneration. Aristocrat Leisure sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Aristocrat Leisure Limited's Growth

Aristocrat Leisure Limited has seen its earnings per share (EPS) increase by 17% a year over the past three years. Its revenue is up 4.9% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 Aristocrat Leisure Limited Been A Good Investment?

Boasting a total shareholder return of 91% over three years, Aristocrat Leisure Limited has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Aristocrat Leisure.

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. 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.