This article will reflect on the compensation paid to Jenny Swain who has served as CEO of Allegra Orthopaedics Limited (ASX:AMT) since 2016. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Allegra Orthopaedics.
View our latest analysis for Allegra Orthopaedics
How Does Total Compensation For Jenny Swain Compare With Other Companies In The Industry?
According to our data, Allegra Orthopaedics Limited has a market capitalization of AU$32m, and paid its CEO total annual compensation worth AU$511k over the year to June 2020. We note that's an increase of 53% above last year. In particular, the salary of AU$300.0k, makes up a huge portion of the total compensation being paid to the CEO.
For comparison, other companies in the industry with market capitalizations below AU$258m, reported a median total CEO compensation of AU$587k. From this we gather that Jenny Swain is paid around the median for CEOs in the industry. What's more, Jenny Swain holds AU$81k worth of shares in the company in their own name.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | AU$300k | AU$282k | 59% |
| Other | AU$211k | AU$51k | 41% |
| Total Compensation | AU$511k | AU$333k | 100% |
On an industry level, roughly 59% of total compensation represents salary and 41% is other remuneration. Our data reveals that Allegra Orthopaedics allocates salary more or less in line with the wider market. 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 Allegra Orthopaedics Limited's Growth Numbers
Over the last three years, Allegra Orthopaedics Limited has shrunk its earnings per share by 77% per year. Its revenue is up 21% over the last year.
Investors would be a bit wary of companies that have lower EPS But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Allegra Orthopaedics Limited Been A Good Investment?
Boasting a total shareholder return of 118% over three years, Allegra Orthopaedics 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.
In Summary...
As we touched on above, Allegra Orthopaedics Limited is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. The company has logged solid shareholder returns for the past three years. Meanwhile, revenues have been increasing recently However, on a concerning note, EPS is not growing. Considering overall performance, it's fair to say Jenny is paid reasonably.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 5 warning signs for Allegra Orthopaedics (1 can't be ignored!) that you should be aware of before investing here.
Switching gears from Allegra Orthopaedics, 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. 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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About ASX:AMT
Allegra Medical Technologies
Allegra Medical Technologies Limited designs, sells, and distributes medical device products in Australia.
Medium with weak fundamentals.
