It's Probably Less Likely That Acumentis Group Limited's (ASX:ACU) CEO Will See A Huge Pay Rise This Year

The underwhelming share price performance of Acumentis Group Limited (ASX:ACU) in the past three years would have disappointed many shareholders. Per share earnings growth is also lacking, despite revenue growth. In light of this performance, shareholders will have a chance to question the board in the upcoming AGM on 28 October 2021, where they can impact on future company performance by voting on resolutions, including executive compensation. Here's our take on why we think shareholders might be hesitant about approving a raise at the moment.

See our latest analysis for Acumentis Group

How Does Total Compensation For Tim Rabbitt Compare With Other Companies In The Industry?

Our data indicates that Acumentis Group Limited has a market capitalization of AU$30m, and total annual CEO compensation was reported as AU$543k for the year to June 2021. We note that's an increase of 18% above last year. Notably, the salary which is AU$396.0k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under AU$267m, the reported median total CEO compensation was AU$510k. From this we gather that Tim Rabbitt is paid around the median for CEOs in the industry. Furthermore, Tim Rabbitt directly owns AU$256k worth of shares in the company.

Component	2021	2020	Proportion (2021)
Salary	AU$396k	AU$360k	73%
Other	AU$147k	AU$99k	27%
Total Compensation	AU$543k	AU$459k	100%

Speaking on an industry level, nearly 73% of total compensation represents salary, while the remainder of 27% is other remuneration. Acumentis Group is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Acumentis Group Limited's Growth

Acumentis Group Limited has reduced its earnings per share by 13% a year over the last three years. It achieved revenue growth of 20% over the last year.

The decrease in EPS could be a concern for some investors. But on the other hand, revenue growth is strong, suggesting a brighter future. 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 Acumentis Group Limited Been A Good Investment?

With a total shareholder return of -61% over three years, Acumentis Group Limited shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

The loss to shareholders over the past three years is certainly concerning and possibly has something to do with the fact that the company's earnings haven't grown. In the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan is in line with their expectations.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 4 warning signs for Acumentis Group you should be aware of, and 1 of them is potentially serious.

Switching gears from Acumentis Group, 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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