Yahoo Finance How Is Altium's (ASX:ALU) CEO Compensated?
Aram Mirkazemi has been the CEO of Altium Limited (ASX:ALU) since 2014, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
See 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$4.5b, and total annual CEO compensation was reported as US$1.7m for the year to June 2020. That's a notable decrease of 45% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$500k.
On comparing similar companies from the same industry with market caps ranging from AU$2.8b to AU$8.8b, we found that the median CEO total compensation was US$3.7m. That is to say, Aram Mirkazemi is paid under the industry median. Moreover, Aram Mirkazemi also holds AU$324m worth of Altium stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2020 | 2019 | Proportion (2020) |
Salary | US$500k | US$500k | 29% |
Other | US$1.2m | US$2.6m | 71% |
Total Compensation | US$1.7m | US$3.1m | 100% |
On an industry level, around 62% of total compensation represents salary and 38% is other remuneration. Altium pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Altium Limited's Growth Numbers
Altium Limited has seen its earnings per share (EPS) increase by 2.8% a year over the past three years. Its revenue is up 10% over the last year.
We would argue that the modest growth in revenue is a notable positive. And, while modest, the EPS growth is noticeable. So while performance isn't amazing, we think it really does seem quite respectable. 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?
We think that the total shareholder return of 252%, over three years, would leave most Altium Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
As we touched on above, Altium Limited is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. On the other hand, shareholder returns have been have been very pleasing, over the last three years, and that should put a smile on the faces of investors. So, considering these tasty returns, CEO compensation seems quite appropriate.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Altium that you should be aware of before investing.
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. 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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