What We Learned About Alexium International Group's (ASX:AJX) CEO Compensation

Simply Wall St
November 27, 2020
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Bob Brookins became the CEO of Alexium International Group Limited (ASX:AJX) in 2018, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Alexium International Group

How Does Total Compensation For Bob Brookins Compare With Other Companies In The Industry?

According to our data, Alexium International Group Limited has a market capitalization of AU$40m, and paid its CEO total annual compensation worth US$392k over the year to June 2020. We note that's a decrease of 18% compared to last year. Notably, the salary which is US$314.3k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under AU$272m, the reported median total CEO compensation was US$258k. Hence, we can conclude that Bob Brookins is remunerated higher than the industry median. Furthermore, Bob Brookins directly owns AU$394k worth of shares in the company.

Component20202019Proportion (2020)
Salary US$314k US$305k 80%
Other US$78k US$175k 20%
Total CompensationUS$392k US$480k100%

On an industry level, roughly 69% of total compensation represents salary and 31% is other remuneration. Alexium International Group is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

ASX:AJX CEO Compensation November 27th 2020

Alexium International Group Limited's Growth

Alexium International Group Limited's earnings per share (EPS) grew 9.6% per year over the last three years. In the last year, its revenue is up 20%.

This revenue growth could really point to a brighter future. And the modest growth in EPS isn't bad, either. So while we'd stop just short of calling this a top performer, but we think it is well worth watching. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Alexium International Group Limited Been A Good Investment?

With a three year total loss of 80% for the shareholders, Alexium International Group Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As previously discussed, Bob is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Over the last three years, shareholder returns have been downright disappointing for Alexium International Group, and although EPS growth is steady, it hasn't set the world on fire. This doesn't look good when you see that Bob is earning more than the industry median. Taking all this into account, it could be hard to get shareholder support for giving Bob a raise.

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. In our study, we found 3 warning signs for Alexium International Group you should be aware of, and 1 of them is a bit concerning.

Switching gears from Alexium International Group, 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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