We Discuss Why Platinum Investment Management Limited's (ASX:PTM) CEO Will Find It Hard To Get A Pay Rise From Shareholders This Year

The disappointing performance at Platinum Investment Management Limited (ASX:PTM) will make some shareholders rather disheartened. At the upcoming AGM on 15 November 2022, shareholders may have the opportunity to influence management to turn the performance around by voting on resolutions such as executive remuneration and other matters. From our analysis below, we think CEO compensation looks appropriate for now.

See our latest analysis for Platinum Investment Management

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

At the time of writing, our data shows that Platinum Investment Management Limited has a market capitalization of AU$1.0b, and reported total annual CEO compensation of AU$778k for the year to June 2022. That's a fairly small increase of 6.1% over the previous year. Notably, the salary which is AU$475.0k, represents most of the total compensation being paid.

On comparing similar companies from the same industry with market caps ranging from AU$611m to AU$2.4b, we found that the median CEO total compensation was AU$2.0m. In other words, Platinum Investment Management pays its CEO lower than the industry median. Furthermore, Andrew Clifford directly owns AU$58m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2022	2021	Proportion (2022)
Salary	AU$475k	AU$450k	61%
Other	AU$303k	AU$284k	39%
Total Compensation	AU$778k	AU$734k	100%

Speaking on an industry level, nearly 59% of total compensation represents salary, while the remainder of 41% is other remuneration. 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 dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Platinum Investment Management Limited's Growth

Over the last three years, Platinum Investment Management Limited has shrunk its earnings per share by 13% per year. It saw its revenue drop 27% over the last year.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Platinum Investment Management Limited Been A Good Investment?

Few Platinum Investment Management Limited shareholders would feel satisfied with the return of -51% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a 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.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 2 warning signs for Platinum Investment Management you should be aware of, and 1 of them is a bit concerning.

Switching gears from Platinum Investment Management, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.