Shareholders Will Probably Hold Off On Increasing Alcidion Group Limited's (ASX:ALC) CEO Compensation For The Time Being

Key Insights

• Alcidion Group's Annual General Meeting to take place on 20th of November
• Total pay for CEO Kate Quirke includes AU$472.9k salary
• The total compensation is similar to the average for the industry
• Alcidion Group's EPS grew by 7.6% over the past three years while total shareholder loss over the past three years was 61%

In the past three years, the share price of Alcidion Group Limited (ASX:ALC) has struggled to grow and now shareholders are sitting on a loss. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 20th of November. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Alcidion Group

Comparing Alcidion Group Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Alcidion Group Limited has a market capitalization of AU$94m, and reported total annual CEO compensation of AU$708k for the year to June 2023. That's a notable increase of 16% on last year. In particular, the salary of AU$472.9k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the Australian Healthcare Services industry with market capitalizations under AU$314m, the reported median total CEO compensation was AU$583k. From this we gather that Kate Quirke is paid around the median for CEOs in the industry. What's more, Kate Quirke holds AU$3.4m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	AU$473k	AU$398k	67%
Other	AU$235k	AU$212k	33%
Total Compensation	AU$708k	AU$611k	100%

Speaking on an industry level, nearly 57% of total compensation represents salary, while the remainder of 43% is other remuneration. Alcidion Group is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Alcidion Group Limited's Growth Numbers

Alcidion Group Limited's earnings per share (EPS) grew 7.6% per year over the last three years. In the last year, its revenue is up 18%.

This revenue growth could really point to a brighter future. And the modest growth in EPS isn't bad, either. So while performance isn't amazing, we think it really does seem quite respectable. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Alcidion Group Limited Been A Good Investment?

The return of -61% over three years would not have pleased Alcidion Group Limited shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Alcidion Group that you should be aware of before investing.

Switching gears from Alcidion Group, 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.