It's Probably Less Likely That Acumentis Group Limited's (ASX:ACU) CEO Will See A Huge Pay Rise This Year

The underwhelming share price performance of Acumentis Group Limited (ASX:ACU) in the past three years would have disappointed many shareholders. Per share earnings growth is also lacking, despite revenue growth. Shareholders will have a chance to take their concerns to the board at the next AGM on 28 October 2021 and vote on resolutions including executive compensation, which studies show may have an impact on company performance. Here's our take on why we think shareholders might be hesitant about approving a raise at the moment.

See our latest analysis for Acumentis Group

Comparing Acumentis Group Limited's CEO Compensation With the industry

Our data indicates that Acumentis Group Limited has a market capitalization of AU$30m, and total annual CEO compensation was reported as AU$543k for the year to June 2021. Notably, that's an increase of 18% over the year before. Notably, the salary which is AU$396.0k, represents most of the total compensation being paid.

On comparing similar-sized companies in the industry with market capitalizations below AU$267m, we found that the median total CEO compensation was AU$510k. From this we gather that Tim Rabbitt is paid around the median for CEOs in the industry. What's more, Tim Rabbitt holds AU$256k worth of shares in the company in their own name.

Talking in terms of the industry, salary represented approximately 73% of total compensation out of all the companies we analyzed, while other remuneration made up 27% of the pie. Our data reveals that Acumentis Group allocates salary more or less in line with the wider market. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Acumentis Group Limited's Growth

Over the last three years, Acumentis Group Limited has shrunk its earnings per share by 13% per year. It achieved revenue growth of 20% over the last year.

The decrease in EPS could be a concern for some investors. But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Acumentis Group Limited Been A Good Investment?

The return of -61% over three years would not have pleased Acumentis Group Limited shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

The loss to shareholders over the past three years is certainly concerning and possibly has something to do with the fact that the company's earnings haven't grown. Shareholders will get the chance at the upcoming AGM to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 4 warning signs (and 1 which makes us a bit uncomfortable) in Acumentis Group we think you should know about.

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.

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.

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