Is Aeeris Limited’s (ASX:AER) CEO Pay Justified?

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Kerry Plowright is the CEO of Aeeris Limited (ASX:AER). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Aeeris

How Does Kerry Plowright’s Compensation Compare With Similar Sized Companies?

According to our data, Aeeris Limited has a market capitalization of AU$8.2m, and pays its CEO total annual compensation worth AU$132k. (This is based on the year to June 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at AU$117k. We took a group of companies with market capitalizations below AU$285m, and calculated the median CEO total compensation to be AU$358k.

A first glance this seems like a real positive for shareholders, since Kerry Plowright is paid less than the average total compensation paid by similar sized companies. Though positive, it’s important we delve into the performance of the actual business.

The graphic below shows how CEO compensation at Aeeris has changed from year to year.

ASX:AER CEO Compensation, June 10th 2019
ASX:AER CEO Compensation, June 10th 2019

Is Aeeris Limited Growing?

Over the last three years Aeeris Limited has grown its earnings per share (EPS) by an average of 21% per year (using a line of best fit). In the last year, its revenue is up 21%.

This demonstrates that the company has been improving recently. A good result. It’s also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. We don’t have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Aeeris Limited Been A Good Investment?

Aeeris Limited has served shareholders reasonably well, with a total return of 21% over three years. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.

In Summary…

It appears that Aeeris Limited remunerates its CEO below most similar sized companies. Since the business is growing, many would argue this suggests the pay is modest. While returns over the last few years haven’t been top notch, there is nothing to suggest to us that Kerry Plowright is overcompensated.

Few would complain about reasonable CEO remuneration when the business is growing earnings per share. It would be an additional positive if insiders are buying shares. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Aeeris (free visualization of insider trades).

If you want to buy a stock that is better than Aeeris, this free list of high return, low debt companies is a great place to look.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.