Shareholders Would Not Be Objecting To Aspermont Limited's (ASX:ASP) CEO Compensation And Here's Why

We have been pretty impressed with the performance at Aspermont Limited (ASX:ASP) recently and CEO Alex Kent deserves a mention for their role in it. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 28 February 2022. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.

See our latest analysis for Aspermont

How Does Total Compensation For Alex Kent Compare With Other Companies In The Industry?

At the time of writing, our data shows that Aspermont Limited has a market capitalization of AU$56m, and reported total annual CEO compensation of AU$720k for the year to September 2021. That's a fairly small increase of 3.9% over the previous year. We note that the salary of AU$360.5k makes up a sizeable portion of the total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under AU$279m, the reported median total CEO compensation was AU$720k. So it looks like Aspermont compensates Alex Kent in line with the median for the industry. Moreover, Alex Kent also holds AU$121k worth of Aspermont stock directly under their own name.

Component	2021	2020	Proportion (2021)
Salary	AU$360k	AU$372k	50%
Other	AU$360k	AU$321k	50%
Total Compensation	AU$720k	AU$693k	100%

On an industry level, roughly 55% of total compensation represents salary and 45% is other remuneration. Our data reveals that Aspermont allocates salary more or less in line with the wider market. 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.

Aspermont Limited's Growth

Aspermont Limited's earnings per share (EPS) grew 70% per year over the last three years. It achieved revenue growth of 5.6% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Aspermont Limited Been A Good Investment?

Most shareholders would probably be pleased with Aspermont Limited for providing a total return of 167% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

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. In saying that, some shareholders may feel that the more important issues to be addressed may be how the management plans to steer the company towards sustainable profitability in the future.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 3 warning signs for Aspermont that investors should look into moving forward.

Switching gears from Aspermont, 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.

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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.