A Look At Archer Materials' (ASX:AXE) CEO Remuneration

This article will reflect on the compensation paid to Mohammad Choucair who has served as CEO of Archer Materials Limited (ASX:AXE) since 2017. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Archer Materials

Comparing Archer Materials Limited's CEO Compensation With the industry

According to our data, Archer Materials Limited has a market capitalization of AU$127m, and paid its CEO total annual compensation worth AU$447k over the year to June 2020. We note that's an increase of 45% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at AU$175k.

In comparison with other companies in the industry with market capitalizations under AU$257m, the reported median total CEO compensation was AU$307k. Hence, we can conclude that Mohammad Choucair is remunerated higher than the industry median. Furthermore, Mohammad Choucair directly owns AU$1.5m worth of shares in the company, implying that they are deeply invested in the company's success.

Speaking on an industry level, nearly 69% of total compensation represents salary, while the remainder of 31% is other remuneration. Archer Materials pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Archer Materials Limited's Growth Numbers

Archer Materials Limited has reduced its earnings per share by 28% a year over the last three years. Its revenue is up 147% over the last year.

Investors would be a bit wary of companies that have lower EPS On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Archer Materials Limited Been A Good Investment?

We think that the total shareholder return of 319%, over three years, would leave most Archer Materials 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.

In Summary...

As previously discussed, Mohammad is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Still, shareholder returns over the last three years,and recent revenue growth have been trending northwards. The only sore spot is EPS growth, which is negative over the same period. All things considered, although EPS growth would've been nice, the positive investor returns and revenue growth lead us to believe Mohammad is appropriately paid.

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. That's why we did our research, and identified 4 warning signs for Archer Materials (of which 2 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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