Here's Why Some Shareholders May Not Be Too Generous With Platinum Investment Management Limited's (ASX:PTM) CEO Compensation This Year

Performance at Platinum Investment Management Limited (ASX:PTM) has not been particularly rosy recently and shareholders will likely be holding CEO Andrew Clifford and the board accountable for this. The next AGM coming up on 17 November 2021 will be a chance for shareholders to have their concerns addressed by the board, challenge management on company strategy and vote on resolutions such as executive remuneration, which may help change the company's future prospects. We think most shareholders will probably pass the CEO compensation, based on what we gathered.

View our latest analysis for Platinum Investment Management

Comparing Platinum Investment Management Limited's CEO Compensation With the industry

At the time of writing, our data shows that Platinum Investment Management Limited has a market capitalization of AU$1.7b, and reported total annual CEO compensation of AU$734k for the year to June 2021. We note that's an increase of 13% above last year. In particular, the salary of AU$450.0k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations ranging from AU$1.4b to AU$4.3b, the reported median CEO total compensation was AU$1.4m. In other words, Platinum Investment Management pays its CEO lower than the industry median. Furthermore, Andrew Clifford directly owns AU$97m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2021	2020	Proportion (2021)
Salary	AU$450k	AU$450k	61%
Other	AU$284k	AU$201k	39%
Total Compensation	AU$734k	AU$651k	100%

Talking in terms of the industry, salary represented approximately 57% of total compensation out of all the companies we analyzed, while other remuneration made up 43% of the pie. Although there is a difference in how total compensation is set, Platinum Investment Management more or less reflects the market in terms of setting the salary. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Platinum Investment Management Limited's Growth

Over the last three years, Platinum Investment Management Limited has shrunk its earnings per share by 4.5% per year. Its revenue is up 6.7% over the last year.

Overall this is not a very positive result for shareholders. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Platinum Investment Management Limited Been A Good Investment?

With a three year total loss of 28% for the shareholders, Platinum Investment Management Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 3 warning signs for Platinum Investment Management you should be aware of, and 1 of them shouldn't be ignored.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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.

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