Shareholders May Not Be So Generous With Austco Healthcare Limited's (ASX:AHC) CEO Compensation And Here's Why

Key Insights

• Austco Healthcare's Annual General Meeting to take place on 31st of October
• Total pay for CEO Clayton Astles includes AU$559.1k salary
• The total compensation is 84% higher than the average for the industry
• Over the past three years, Austco Healthcare's EPS fell by 6.7% and over the past three years, the total shareholder return was 75%

Performance at Austco Healthcare Limited (ASX:AHC) has been reasonably good and CEO Clayton Astles has done a decent job of steering the company in the right direction. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 31st of October. However, some shareholders will still be cautious of paying the CEO excessively.

Check out our latest analysis for Austco Healthcare

Comparing Austco Healthcare Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Austco Healthcare Limited has a market capitalization of AU$49m, and reported total annual CEO compensation of AU$915k for the year to June 2023. That's a modest increase of 6.8% on the prior year. Notably, the salary which is AU$559.1k, represents most of the total compensation being paid.

In comparison with other companies in the Australian Medical Equipment industry with market capitalizations under AU$316m, the reported median total CEO compensation was AU$496k. Hence, we can conclude that Clayton Astles is remunerated higher than the industry median. What's more, Clayton Astles holds AU$607k worth of shares in the company in their own name.

Component	2023	2022	Proportion (2023)
Salary	AU$559k	AU$496k	61%
Other	AU$356k	AU$361k	39%
Total Compensation	AU$915k	AU$857k	100%

On an industry level, roughly 62% of total compensation represents salary and 38% is other remuneration. Austco Healthcare is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. 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.

A Look at Austco Healthcare Limited's Growth Numbers

Austco Healthcare Limited has reduced its earnings per share by 6.7% a year over the last three years. In the last year, its revenue is up 17%.

Investors would be a bit wary of companies that have lower EPS But in contrast the revenue growth is strong, suggesting future potential for EPS growth. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Austco Healthcare Limited Been A Good Investment?

Boasting a total shareholder return of 75% over three years, Austco Healthcare Limited has done well by shareholders. 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.

To Conclude...

The overall company performance has been commendable, however there are still areas for improvement. Until EPS growth picks back up, we think shareholders may find it hard to justify increasing CEO pay given that they are already paid above industry average.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for Austco Healthcare that investors should be aware of in a dynamic business environment.

Switching gears from Austco Healthcare, 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.