Here's What We Learned About The CEO Pay At AusQuest Limited (ASX:AQD)

Graeme Drew is the CEO of AusQuest Limited (ASX:AQD), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also assess whether AusQuest pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for AusQuest

How Does Total Compensation For Graeme Drew Compare With Other Companies In The Industry?

Our data indicates that AusQuest Limited has a market capitalization of AU$10m, and total annual CEO compensation was reported as AU$219k for the year to June 2020. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at AU$200.0k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below AU$259m, reported a median total CEO compensation of AU$306k. From this we gather that Graeme Drew is paid around the median for CEOs in the industry. Moreover, Graeme Drew also holds AU$271k worth of AusQuest stock directly under their own name.

Speaking on an industry level, nearly 69% of total compensation represents salary, while the remainder of 31% is other remuneration. It's interesting to note that AusQuest pays out a greater portion of remuneration through salary, compared to the industry. 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 AusQuest Limited's Growth Numbers

AusQuest Limited's earnings per share (EPS) grew 12% per year over the last three years. It saw its revenue drop 44% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 AusQuest Limited Been A Good Investment?

Since shareholders would have lost about 11% over three years, some AusQuest Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

As we noted earlier, AusQuest pays its CEO in line with similar-sized companies belonging to the same industry. On the other hand, the company has logged negative shareholder returns over the previous three years. But EPS growth is moving in a favorable direction, certainly a positive sign. Considering positive EPS growth, we'd say compensation is fair, but shareholders may be wary of a bump in pay before the company logs positive returns.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 4 warning signs for AusQuest you should be aware of, and 3 of them don't sit too well with us.

Important note: AusQuest 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.

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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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