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Geoff Grady became the CEO of Aveo Group (ASX:AOG) in 1970. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
View our latest analysis for Aveo Group
How Does Geoff Grady's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Aveo Group has a market cap of AU$1.2b, and is paying total annual CEO compensation of AU$2.4m. (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$705k. We looked at a group of companies with market capitalizations from AU$579m to AU$2.3b, and the median CEO total compensation was AU$1.4m.
Thus we can conclude that Geoff Grady receives more in total compensation than the median of a group of companies in the same market, and of similar size to Aveo Group. However, this doesn't necessarily mean the pay 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 Aveo Group has changed over time.
Is Aveo Group Growing?
Aveo Group has increased its earnings per share (EPS) by an average of 29% a year, over the last three years (using a line of best fit). It saw its revenue drop -15% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Shareholders might be interested in this free visualization of analyst forecasts.
Has Aveo Group Been A Good Investment?
Since shareholders would have lost about 29% over three years, some Aveo Group 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 the total CEO remuneration paid by Aveo Group, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. On the other hand returns to investors over the same period have probably disappointed many. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. Shareholders may want to check for free if Aveo Group insiders are buying or selling shares.