How Should Investors Feel About Aberdeen International Inc.’s (TSE:AAB) CEO Pay?

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Stan Bharti has been the CEO of Aberdeen International Inc. (TSE:AAB) since 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for Aberdeen International

How Does Stan Bharti’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Aberdeen International Inc. has a market cap of CA$5.3m, and is paying total annual CEO compensation of CA$3.1m. (This figure is for the year to January 2018). We think total compensation is more important but we note that the CEO salary is lower, at CA$300k. We examined a group of similar sized companies, with market capitalizations of below CA$264m. The median CEO compensation in that group is CA$158k.

Thus we can conclude that Stan Bharti receives more in total compensation than the median of a group of companies in the same market, and of similar size to Aberdeen International Inc.. However, this doesn’t necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see, below, how CEO compensation at Aberdeen International has changed over time.

TSX:AAB CEO Compensation, February 25th 2019
TSX:AAB CEO Compensation, February 25th 2019

Is Aberdeen International Inc. Growing?

Over the last three years Aberdeen International Inc. has shrunk its earnings per share by an average of 6.3% per year (measured with a line of best fit). It saw its revenue drop -185% over the last year.

Sadly for shareholders, earnings per share are actually down, over three years. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don’t have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Aberdeen International Inc. Been A Good Investment?

Since shareholders would have lost about 45% over three years, some Aberdeen International Inc. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.

In Summary…

We compared total CEO remuneration at Aberdeen International Inc. with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.

Earnings per share have not grown in three years, and the revenue growth fails to impress us.

Over the same period, investors would have come away with nothing in the way of share price gains. Some might well form the view that the CEO is paid too generously! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Aberdeen International.

Important note: Aberdeen International may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.