This article will reflect on the compensation paid to Clayton Astles who has served as CEO of Austco Healthcare Limited (ASX:AZV) since 2015. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Austco Healthcare.
Check out our latest analysis for Austco Healthcare
Comparing Austco Healthcare Limited's CEO Compensation With the industry
Our data indicates that Austco Healthcare Limited has a market capitalization of AU$31m, and total annual CEO compensation was reported as AU$875k for the year to June 2020. That's a notable increase of 14% on last year. We note that the salary portion, which stands at AU$547.4k constitutes the majority of total compensation received by the CEO.
On comparing similar-sized companies in the industry with market capitalizations below AU$257m, we found that the median total CEO compensation was AU$590k. Hence, we can conclude that Clayton Astles is remunerated higher than the industry median. Furthermore, Clayton Astles directly owns AU$239k worth of shares in the company.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | AU$547k | AU$570k | 63% |
| Other | AU$328k | AU$200k | 37% |
| Total Compensation | AU$875k | AU$771k | 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, Austco Healthcare more or less reflects the market in terms of setting the salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at Austco Healthcare Limited's Growth Numbers
Over the past three years, Austco Healthcare Limited has seen its earnings per share (EPS) grow by 125% per year. Revenue was pretty flat on last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Austco Healthcare Limited Been A Good Investment?
Boasting a total shareholder return of 67% over three years, Austco Healthcare Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
As we noted earlier, Austco Healthcare pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Importantly though, EPS growth and shareholder returns are very impressive over the last three years. So, in acknowledgment of the overall excellent performance, we believe CEO compensation is appropriate. The pleasing shareholder returns are the cherry on top. We wouldn't be wrong in saying that shareholders feel that Clayton's performance creates value for the company.
CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 2 warning signs for Austco Healthcare that investors should look into moving forward.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
If you’re looking to trade Austco Healthcare, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted
New: Manage All Your Stock Portfolios in One Place
We've created the ultimate portfolio companion for stock investors, and it's free.
• Connect an unlimited number of Portfolios and see your total in one currency
• Be alerted to new Warning Signs or Risks via email or mobile
• Track the Fair Value of your stocks
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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
About ASX:AHC
Austco Healthcare
Operates as provider of healthcare communication solutions in Australia, New Zealand, Asia, Europe, and North America.
Flawless balance sheet with solid track record.
