HUB24 Limited's (ASX:HUB) CEO Will Probably Have Their Compensation Approved By Shareholders

Key Insights

• HUB24 will host its Annual General Meeting on 16th of November
• CEO Andrew Alcock's total compensation includes salary of AU$675.8k
• Total compensation is similar to the industry average
• HUB24's EPS grew by 50% over the past three years while total shareholder return over the past three years was 54%

We have been pretty impressed with the performance at HUB24 Limited (ASX:HUB) recently and CEO Andrew Alcock deserves a mention for their role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 16th of November. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

View our latest analysis for HUB24

How Does Total Compensation For Andrew Alcock Compare With Other Companies In The Industry?

At the time of writing, our data shows that HUB24 Limited has a market capitalization of AU$2.7b, and reported total annual CEO compensation of AU$3.5m for the year to June 2023. That's mostly flat as compared to the prior year's compensation. We think total compensation is more important but our data shows that the CEO salary is lower, at AU$676k.

For comparison, other companies in the Australian Capital Markets industry with market capitalizations ranging between AU$1.6b and AU$5.0b had a median total CEO compensation of AU$3.2m. From this we gather that Andrew Alcock is paid around the median for CEOs in the industry. Furthermore, Andrew Alcock directly owns AU$36m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	AU$676k	AU$622k	19%
Other	AU$2.8m	AU$2.9m	81%
Total Compensation	AU$3.5m	AU$3.5m	100%

Speaking on an industry level, nearly 65% of total compensation represents salary, while the remainder of 35% is other remuneration. HUB24 sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at HUB24 Limited's Growth Numbers

Over the past three years, HUB24 Limited has seen its earnings per share (EPS) grow by 50% per year. Its revenue is up 45% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has HUB24 Limited Been A Good Investment?

We think that the total shareholder return of 54%, over three years, would leave most HUB24 Limited shareholders smiling. 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...

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. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 1 warning sign for HUB24 that investors should look into moving forward.

Important note: HUB24 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.