Shareholders Will Probably Not Have Any Issues With Aristocrat Leisure Limited's (ASX:ALL) CEO Compensation

Performance at Aristocrat Leisure Limited (ASX:ALL) has been rather uninspiring recently and shareholders may be wondering how CEO Trevor Croker plans to fix this. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 24 February 2023. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. In our opinion, CEO compensation does not look excessive and we discuss why.

Check out our latest analysis for Aristocrat Leisure

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

Our data indicates that Aristocrat Leisure Limited has a market capitalization of AU$24b, and total annual CEO compensation was reported as AU$7.1m for the year to September 2022. That's a slight decrease of 5.8% on the prior year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at AU$1.8m.

For comparison, other companies in the Australian Hospitality industry with market capitalizations above AU$12b, reported a median total CEO compensation of AU$19m. In other words, Aristocrat Leisure pays its CEO lower than the industry median. Moreover, Trevor Croker also holds AU$21m worth of Aristocrat Leisure stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2022	2021	Proportion (2022)
Salary	AU$1.8m	AU$1.8m	26%
Other	AU$5.3m	AU$5.8m	74%
Total Compensation	AU$7.1m	AU$7.5m	100%

On an industry level, around 54% of total compensation represents salary and 46% is other remuneration. It's interesting to note that Aristocrat Leisure allocates a smaller portion of compensation to salary in comparison to the broader 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

Over the past three years, Aristocrat Leisure Limited has seen its earnings per share (EPS) grow by 9.6% per year. In the last year, its revenue is up 18%.

We think the revenue growth is good. And the improvement in EPSis modest but respectable. Although we'll stop short of calling the stock a top performer, we think the company has potential. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Aristocrat Leisure Limited Been A Good Investment?

With a three year total loss of 0.4% for the shareholders, Aristocrat Leisure Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

The lack lustre share price performance may have something to do with the flat earnings growth. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board and assess if the board's plan is likely to improve company performance.

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

Important note: Aristocrat Leisure 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.