In This Article:
Paul Challis became the CEO of Australian Agricultural Projects Ltd (ASX:AAP) in 2007. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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.
Check out our latest analysis for Australian Agricultural Projects
How Does Paul Challis’s Compensation Compare With Similar Sized Companies?
According to our data, Australian Agricultural Projects Ltd has a market capitalization of AU$3.4m, and pays its CEO total annual compensation worth AU$156k. That’s actually a decrease on the year before. We examined a group of similar sized companies, with market capitalizations of below AU$274m. The median CEO compensation in that group is AU$362k.
Most shareholders would consider it a positive that Paul Challis takes less compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see, below, how CEO compensation at Australian Agricultural Projects has changed over time.
Is Australian Agricultural Projects Ltd Growing?
Over the last three years Australian Agricultural Projects Ltd has shrunk its earnings per share by an average of 73% per year. It saw its revenue drop -44% over the last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO.
We don’t have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Australian Agricultural Projects Ltd Been A Good Investment?
Australian Agricultural Projects Ltd has served shareholders reasonably well, with a total return of 10.0% over three years. 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…
It appears that Australian Agricultural Projects Ltd remunerates its CEO below most similar sized companies.
Shareholders should note that compensation for Paul Challis is under the median of a group of similar sized companies. But the business isn’t growing earnings per share, and the returns to shareholders haven’t been wonderful. There is room for improved company performance, but we don’t see the CEO pay as a big issue here.