Shareholders will be pleased by the impressive results for Avacta Group Plc (LON:AVCT) recently and CEO Alastair Smith has played a key role. This would be kept in mind at the upcoming AGM on 28 June 2021 which will be a chance for them to hear the board review the financial results, discuss future company strategy and vote on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and probably deserves a well-earned pay rise.

Check out our latest analysis for Avacta Group

How Does Total Compensation For Alastair Smith Compare With Other Companies In The Industry?

At the time of writing, our data shows that Avacta Group Plc has a market capitalization of UK£455m, and reported total annual CEO compensation of UK£275k for the year to December 2020. That's a notable decrease of 16% on last year. In particular, the salary of UK£237.0k, makes up a huge portion of the total compensation being paid to the CEO.

On examining similar-sized companies in the industry with market capitalizations between UK£287m and UK£1.1b, we discovered that the median CEO total compensation of that group was UK£697k. In other words, Avacta Group pays its CEO lower than the industry median. Furthermore, Alastair Smith directly owns UK£785k worth of shares in the company.

Speaking on an industry level, nearly 66% of total compensation represents salary, while the remainder of 34% is other remuneration. Avacta Group pays out 86% of remuneration in the form of a salary, significantly higher than the industry average. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Avacta Group Plc's Growth Numbers

Over the past three years, Avacta Group Plc has seen its earnings per share (EPS) grow by 17% per year. In the last year, its revenue is down 6.6%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Avacta Group Plc Been A Good Investment?

Boasting a total shareholder return of 528% over three years, Avacta Group Plc has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Seeing that company performance has been quite good recently, some shareholders may feel that CEO compensation may not be the biggest focus in the upcoming AGM. Seeing that earnings growth and share price performance seems to be on the right path, the more pressing focus for shareholders at the AGM may be how the board and management plans to turn the company into a sustainably profitable one.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 4 warning signs for Avacta Group (1 doesn't sit too well with us!) that you should be aware of before investing here.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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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