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In 2014 Andrew Skelton was appointed CEO of A2B Australia Limited (ASX:A2B). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for A2B Australia

How Does Andrew Skelton's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that A2B Australia Limited has a market cap of AU$214m, and is paying total annual CEO compensation of AU$1.1m. (This number is for the twelve months until June 2018). While we always look at total compensation first, we note that the salary component is less, at AU$680k. We looked at a group of companies with market capitalizations from AU$143m to AU$571m, and the median CEO total compensation was AU$711k.

It would therefore appear that A2B Australia Limited pays Andrew Skelton more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see, below, how CEO compensation at A2B Australia has changed over time.

Is A2B Australia Limited Growing?

On average over the last three years, A2B Australia Limited has shrunk earnings per share by 54% each year (measured with a line of best fit). It achieved revenue growth of 21% over the last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.

Has A2B Australia Limited Been A Good Investment?

With a three year total loss of 26%, A2B Australia Limited would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

We compared total CEO remuneration at A2B Australia Limited with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.

We think many shareholders would be underwhelmed with the business growth over the last three years.

Over the same period, investors would have come away with nothing in the way of share price gains. This analysis suggests to us that the CEO is paid too generously! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling A2B Australia (free visualization of insider trades).

Important note: A2B Australia 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.