The CEO of Axiom Properties Limited (ASX:AXI) is Ben Laurance, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
View our latest analysis for Axiom Properties
How Does Total Compensation For Ben Laurance Compare With Other Companies In The Industry?
Our data indicates that Axiom Properties Limited has a market capitalization of AU$28m, and total annual CEO compensation was reported as AU$773k for the year to June 2020. We note that's an increase of 21% above last year. Notably, the salary which is AU$531.8k, represents most of the total compensation being paid.
On comparing similar-sized companies in the industry with market capitalizations below AU$261m, we found that the median total CEO compensation was AU$488k. This suggests that Ben Laurance is paid more than the median for the industry. What's more, Ben Laurance holds AU$4.6m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | AU$532k | AU$516k | 69% |
| Other | AU$241k | AU$122k | 31% |
| Total Compensation | AU$773k | AU$638k | 100% |
Talking in terms of the industry, salary represented approximately 81% of total compensation out of all the companies we analyzed, while other remuneration made up 19% of the pie. In Axiom Properties' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. 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.
A Look at Axiom Properties Limited's Growth Numbers
Over the last three years, Axiom Properties Limited has shrunk its earnings per share by 60% per year. Its revenue is up 25% over the last year.
The decrease in EPS could be a concern for some investors. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Axiom Properties Limited Been A Good Investment?
Boasting a total shareholder return of 84% over three years, Axiom Properties Limited has done well by shareholders. 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.
To Conclude...
As previously discussed, Ben is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. But shareholder returns and revenue growth have been very healthy as we saw before. Importantly though, EPS has not been growing over the same stretch. Considering all the factors, we would have to say CEO pay is fair; however, moving forward, it would be nice to see EPS growth from the company as well.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 4 warning signs for Axiom Properties (3 are a bit unpleasant!) that you should be aware of before investing here.
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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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. 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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About ASX:AXI
Axiom Properties
Engages in property investment and development activities in Australia.
Slight with mediocre balance sheet.
