Yahoo Finance Is Abano Healthcare Group Limited’s (NZSE:ABA) CEO Pay Fair?
In 2015 Richard Keys was appointed CEO of Abano Healthcare Group Limited (NZSE:ABA). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. 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.
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How Does Richard Keys’s Compensation Compare With Similar Sized Companies?
According to our data, Abano Healthcare Group Limited has a market capitalization of NZ$167m, and pays its CEO total annual compensation worth NZ$667k. (This number is for the twelve months until 2017). We think total compensation is more important but we note that the CEO salary is lower, at NZ$545k. We looked at a group of companies with market capitalizations under NZ$295m, and the median CEO compensation was NZ$124k.
As you can see, Richard Keys is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Abano Healthcare Group Limited is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at Abano Healthcare Group has changed from year to year.
Is Abano Healthcare Group Limited Growing?
Abano Healthcare Group Limited has reduced its earnings per share by an average of 29% a year, over the last three years. In the last year, its revenue is up 20%.
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.
Shareholders might be interested in this free visualization of analyst forecasts. .
Has Abano Healthcare Group Limited Been A Good Investment?
With a total shareholder return of 9.2% over three years, Abano Healthcare Group Limited has done okay by shareholders. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.
In Summary…
We compared the total CEO remuneration paid by Abano Healthcare Group Limited, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.
While shareholder returns are acceptable, they don’t delight. So you may want to delve deeper, because we don’t think the CEO pay is too low. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Abano Healthcare Group (free visualization of insider trades).
Or you could feast your eyes on this interactive graph depicting past earnings, cash flow and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
