This Is The Reason Why We Think Aeeris Limited's (ASX:AER) CEO Might Be Underpaid

The solid performance at Aeeris Limited (ASX:AER) has been impressive and shareholders will probably be pleased to know that CEO Kerry Plowright has delivered. At the upcoming AGM on 27 October 2021, they would be interested to hear about the company strategy going forward and get a chance to cast their votes on resolutions such as executive remuneration and other company matters. We think the CEO has done a pretty decent job and probably deserves a well-earned pay rise.

Check out our latest analysis for Aeeris

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

According to our data, Aeeris Limited has a market capitalization of AU$13m, and paid its CEO total annual compensation worth AU$128k over the year to June 2021. We note that's a decrease of 26% compared to last year. It is worth noting that the CEO compensation consists entirely of the salary, worth AU$128k.

In comparison with other companies in the industry with market capitalizations under AU$268m, the reported median total CEO compensation was AU$363k. In other words, Aeeris pays its CEO lower than the industry median. Moreover, Kerry Plowright also holds AU$4.2m worth of Aeeris stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2021	2020	Proportion (2021)
Salary	AU$128k	AU$126k	100%
Other	-	AU$47k	-
Total Compensation	AU$128k	AU$173k	100%

Speaking on an industry level, nearly 51% of total compensation represents salary, while the remainder of 49% is other remuneration. At the company level, Aeeris pays Kerry Plowright solely through a salary, preferring to go down a conventional route. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Aeeris Limited's Growth

Aeeris Limited has seen its earnings per share (EPS) increase by 94% a year over the past three years. Its revenue is up 11% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. 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 Aeeris Limited Been A Good Investment?

Boasting a total shareholder return of 177% over three years, Aeeris Limited has done well by shareholders. 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...

Aeeris pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Seeing that company performance has been quite good recently, some shareholders may feel that CEO compensation may not be the biggest focus in the upcoming AGM. Seeing that earnings growth and share price performance seems to be on the right path, the more pressing focus for shareholders at the AGM may be how the board and management plans to turn the company into a sustainably profitable one.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 5 warning signs for Aeeris (1 is concerning!) that you should be aware of before investing here.

Switching gears from Aeeris, 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.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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