How Much is Adslot's (ASX:ADS) CEO Getting Paid?

Ben Dixon became the CEO of Adslot Limited (ASX:ADS) in 2018, and we think it's a good time to look at 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 Adslot

How Does Total Compensation For Ben Dixon Compare With Other Companies In The Industry?

At the time of writing, our data shows that Adslot Limited has a market capitalization of AU$55m, and reported total annual CEO compensation of AU$307k for the year to June 2020. We note that's a decrease of 12% compared to last year. In particular, the salary of AU$277.5k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below AU$260m, reported a median total CEO compensation of AU$331k. From this we gather that Ben Dixon is paid around the median for CEOs in the industry. Furthermore, Ben Dixon directly owns AU$1.1m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, roughly 59% of total compensation represents salary and 41% is other remuneration. According to our research, Adslot has allocated a higher percentage of pay to salary in comparison to the wider 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.

Adslot Limited's Growth

Adslot Limited's earnings per share (EPS) grew 7.9% per year over the last three years. Revenue was pretty flat on last year.

We would prefer it if there was revenue growth, but it is good to see a modest EPS growth at least. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Adslot Limited Been A Good Investment?

Given the total shareholder loss of 28% over three years, many shareholders in Adslot Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As we touched on above, Adslot Limited is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. This doesn't look good when you place it against the backdrop of negative shareholder returns and flat EPS growth. Although we wouldn't say CEO compensation is exceptionally high, it isn't very low either. Shareholders might want to see substantial improvements in returns before agreeing that Ben deserves a raise.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 4 warning signs (and 2 which are significant) in Adslot we think you should know about.

Important note: Adslot is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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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