Martin Mercer became the CEO of Arq Group Limited (ASX:ARQ) in 2014. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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 method should give us information to assess how appropriately the company pays the CEO.
View our latest analysis for Arq Group
How Does Martin Mercer's Compensation Compare With Similar Sized Companies?
According to our data, Arq Group Limited has a market capitalization of AU$66m, and pays its CEO total annual compensation worth AU$925k. (This number is for the twelve months until December 2018). While we always look at total compensation first, we note that the salary component is less, at AU$616k. We looked at a group of companies with market capitalizations under AU$294m, and the median CEO total compensation was AU$359k.
Thus we can conclude that Martin Mercer receives more in total compensation than the median of a group of companies in the same market, and of similar size to Arq Group Limited. 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 a visual representation of the CEO compensation at Arq Group, below.
Is Arq Group Limited Growing?
On average over the last three years, Arq Group Limited has shrunk earnings per share by 64% each year (measured with a line of best fit). It saw its revenue drop -12% over the last year.
Unfortunately, earnings per share have trended lower over the last three years. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.
Has Arq Group Limited Been A Good Investment?
Since shareholders would have lost about 68% over three years, some Arq Group Limited 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 Arq Group 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.