Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
In 2016 Jenny Swain was appointed CEO of Allegra Orthopaedics Limited (ASX:AMT). First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Jenny Swain’s Compensation Compare With Similar Sized Companies?
According to our data, Allegra Orthopaedics Limited has a market capitalization of AU$7.9m, and pays its CEO total annual compensation worth AU$364k. (This number is for the twelve months until June 2018). While we always look at total compensation first, we note that the salary component is less, at AU$287k. We examined a group of similar sized companies, with market capitalizations of below AU$287m. The median CEO total compensation in that group is AU$358k.
So Jenny Swain receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.
You can see a visual representation of the CEO compensation at Allegra Orthopaedics, below.
Is Allegra Orthopaedics Limited Growing?
On average over the last three years, Allegra Orthopaedics Limited has grown earnings per share (EPS) by 73% each year (using a line of best fit). Its revenue is down -11% over last year.
This demonstrates that the company has been improving recently. A good result. While it would be good to see revenue growth, profits matter more in the end. We don’t have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Allegra Orthopaedics Limited Been A Good Investment?
Since shareholders would have lost about 43% over three years, some Allegra Orthopaedics Limited shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
Remuneration for Jenny Swain is close enough to the median pay for a CEO of a similar sized company .
We think that the EPS growth is very pleasing, but we cannot say the same about the lacklustre shareholder returns (over the last three years). Considering the the positives we don’t think the CEO pays is too high, but it’s certainly hard to argue it is too low. Whatever your view on compensation, you might want to check if insiders are buying or selling Allegra Orthopaedics shares (free trial).
Important note: Allegra Orthopaedics may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.