Why We Think AUB Group Limited's (ASX:AUB) CEO Compensation Is Not Excessive At All

Performance at AUB Group Limited (ASX:AUB) has been reasonably good and CEO Mike Emmett has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 09 November 2021. We present our case of why we think CEO compensation looks fair.

See our latest analysis for AUB Group

Comparing AUB Group Limited's CEO Compensation With the industry

According to our data, AUB Group Limited has a market capitalization of AU$1.7b, and paid its CEO total annual compensation worth AU$2.6m over the year to June 2021. Notably, that's an increase of 12% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at AU$828k.

On comparing similar companies from the same industry with market caps ranging from AU$1.3b to AU$4.3b, we found that the median CEO total compensation was AU$2.7m. So it looks like AUB Group compensates Mike Emmett in line with the median for the industry.

Component	2021	2020	Proportion (2021)
Salary	AU$828k	AU$810k	32%
Other	AU$1.7m	AU$1.5m	68%
Total Compensation	AU$2.6m	AU$2.3m	100%

Talking in terms of the industry, salary represented approximately 42% of total compensation out of all the companies we analyzed, while other remuneration made up 58% of the pie. It's interesting to note that AUB Group 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.

AUB Group Limited's Growth

AUB Group Limited's earnings per share (EPS) grew 9.2% per year over the last three years. In the last year, its revenue is up 4.9%.

We're not particularly impressed by the revenue growth, but the modest improvement in EPS is good. So there are some positives here, but not enough to earn high praise. 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 AUB Group Limited Been A Good Investment?

We think that the total shareholder return of 82%, over three years, would leave most AUB Group Limited shareholders smiling. 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 decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, we still think that any proposed increase in CEO compensation will be examined closely to make sure the compensation is appropriate and linked to performance.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for AUB Group that you should be aware of before investing.

Important note: AUB Group 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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