Nanosonics Limited's (ASX:NAN) CEO Looks Due For A Compensation Raise

Shareholders will be pleased by the impressive results for Nanosonics Limited (ASX:NAN) recently and CEO Michael Kavanagh has played a key role. At the upcoming AGM on 19 November 2021, they will get a chance to hear the board review the company results, discuss future strategy and cast their vote on any resolutions such as executive remuneration. We think the CEO has done a pretty decent job and probably deserves a well-earned pay rise.

Check out our latest analysis for Nanosonics

Comparing Nanosonics Limited's CEO Compensation With the industry

Our data indicates that Nanosonics Limited has a market capitalization of AU$1.8b, and total annual CEO compensation was reported as AU$1.4m for the year to June 2021. That's mostly flat as compared to the prior year's compensation. While we always look at total compensation first, our analysis shows that the salary component is less, at AU$642k.

On comparing similar companies from the same industry with market caps ranging from AU$1.4b to AU$4.4b, we found that the median CEO total compensation was AU$2.4m. This suggests that Michael Kavanagh is paid below the industry median. What's more, Michael Kavanagh holds AU$8.1m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2021	2020	Proportion (2021)
Salary	AU$642k	AU$652k	45%
Other	AU$781k	AU$742k	55%
Total Compensation	AU$1.4m	AU$1.4m	100%

On an industry level, around 61% of total compensation represents salary and 39% is other remuneration. It's interesting to note that Nanosonics allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Nanosonics Limited's Growth Numbers

Nanosonics Limited's earnings per share (EPS) grew 14% per year over the last three years. Its revenue is up 3.0% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Nanosonics Limited Been A Good Investment?

Most shareholders would probably be pleased with Nanosonics Limited for providing a total return of 83% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

Shareholders may want to check for free if Nanosonics insiders are buying or selling shares.

Important note: Nanosonics is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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.

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