It May Be Possible That Altium Limited's (ASX:ALU) CEO Compensation Could Get Bumped Up

Key Insights

• Altium will host its Annual General Meeting on 16th of November
• CEO Aram Mirkazemi's total compensation includes salary of US$500.0k
• The total compensation is 77% less than the average for the industry
• Over the past three years, Altium's EPS grew by 49% and over the past three years, the total shareholder return was 18%

Shareholders will be pleased by the robust performance of Altium Limited (ASX:ALU) recently and this will be kept in mind in the upcoming AGM on 16th of November. The focus will probably be on the future strategic initiatives that the board and management will put in place to improve the business rather than executive remuneration when they cast their votes on company resolutions. We have prepared some analysis below and we show why we think CEO compensation looks decent with even the possibility for a raise.

Check out our latest analysis for Altium

How Does Total Compensation For Aram Mirkazemi Compare With Other Companies In The Industry?

Our data indicates that Altium Limited has a market capitalization of AU$5.6b, and total annual CEO compensation was reported as US$862k for the year to June 2023. That's a notable decrease of 13% on last year. In particular, the salary of US$500.0k, makes up a fairly large portion of the total compensation being paid to the CEO.

In comparison with other companies in the Australian Software industry with market capitalizations ranging from AU$3.1b to AU$9.9b, the reported median CEO total compensation was US$3.8m. That is to say, Aram Mirkazemi is paid under the industry median. Moreover, Aram Mirkazemi also holds AU$402m worth of Altium stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	US$500k	US$500k	58%
Other	US$362k	US$494k	42%
Total Compensation	US$862k	US$994k	100%

Talking in terms of the industry, salary represented approximately 59% of total compensation out of all the companies we analyzed, while other remuneration made up 41% of the pie. Altium is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. 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 Altium Limited's Growth Numbers

Altium Limited has seen its earnings per share (EPS) increase by 49% a year over the past three years. Its revenue is up 19% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Altium Limited Been A Good Investment?

With a total shareholder return of 18% over three years, Altium Limited shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

The company's overall performance, while not bad, could be better. If it manages to keep up the current streak, CEO remuneration could well be one of shareholders' least concerns. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

Whatever your view on compensation, you might want to check if insiders are buying or selling Altium shares (free trial).

Switching gears from Altium, 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.