Stock Analysis

How Should Investors Feel About Aeeris' (ASX:AER) CEO Remuneration?

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ASX:AER
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Kerry Plowright is the CEO of Aeeris Limited (ASX:AER), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Aeeris.

Check out our latest analysis for Aeeris

How Does Total Compensation For Kerry Plowright Compare With Other Companies In The Industry?

Our data indicates that Aeeris Limited has a market capitalization of AU$7.5m, and total annual CEO compensation was reported as AU$173k for the year to June 2020. Notably, that's an increase of 27% over the year before. In particular, the salary of AU$126.2k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the industry with market capitalizations below AU$259m, we found that the median total CEO compensation was AU$327k. In other words, Aeeris pays its CEO lower than the industry median. Furthermore, Kerry Plowright directly owns AU$2.4m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20202019Proportion (2020)
Salary AU$126k AU$136k 73%
Other AU$47k - 27%
Total CompensationAU$173k AU$136k100%

On an industry level, roughly 73% of total compensation represents salary and 27% is other remuneration. There isn't a significant difference between Aeeris and the broader market, in terms of salary allocation in the overall compensation package. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

ceo-compensation
ASX:AER CEO Compensation January 14th 2021

Aeeris Limited's Growth

Aeeris Limited's earnings per share (EPS) grew 89% per year over the last three years. It achieved revenue growth of 2.3% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Aeeris Limited Been A Good Investment?

We think that the total shareholder return of 213%, over three years, would leave most Aeeris 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...

As previously discussed, Kerry is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. Since EPS growth is heading in a positive direction; many would agree with our assessment that the pay is modest. Given the strong history of shareholder returns, the shareholders are probably very happy with Kerry's performance.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 2 warning signs for Aeeris (of which 1 is a bit concerning!) 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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