Key Insights

Link Administration Holdings will host its Annual General Meeting on 28th of November Salary of AU$1.47m is part of CEO Vivek Bhatia's total remuneration The total compensation is 183% higher than the average for the industry Over the past three years, Link Administration Holdings' EPS fell by 16%  and over the past three years, the total loss to shareholders 53%

The results at Link Administration Holdings Limited (ASX:LNK) have been quite disappointing recently and CEO Vivek Bhatia bears some responsibility for this. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 28th of November. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Check out our latest analysis for Link Administration Holdings

How Does Total Compensation For Vivek Bhatia Compare With Other Companies In The Industry?

Our data indicates that Link Administration Holdings Limited has a market capitalization of AU$583m, and total annual CEO compensation was reported as AU$4.5m for the year to June 2023. That's mostly flat as compared to the prior year's compensation. While we always look at total compensation first, our analysis shows that the salary component is less, at AU$1.5m.

In comparison with other companies in the Australian Professional Services industry with market capitalizations ranging from AU$305m to AU$1.2b, the reported median CEO total compensation was AU$1.6m. Hence, we can conclude that Vivek Bhatia is remunerated higher than the industry median. Furthermore, Vivek Bhatia directly owns AU$739k worth of shares in the company.

Component 2023 2022 Proportion (2023) Salary AU$1.5m AU$1.4m 33% Other AU$3.0m AU$3.1m 67% Total Compensation AU$4.5m AU$4.5m 100%

On an industry level, roughly 65% of total compensation represents salary and 35% is other remuneration. Link Administration Holdings pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

 ceo-compensation

Link Administration Holdings Limited's Growth

Over the last three years, Link Administration Holdings Limited has shrunk its earnings per share by 16% per year. Its revenue is up 8.2% over the last year.

Overall this is not a very positive result for shareholders. The fairly low revenue growth fails to impress given that the EPS is down. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Link Administration Holdings Limited Been A Good Investment?

The return of -53% over three years would not have pleased Link Administration Holdings Limited shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 3 warning signs for Link Administration Holdings you should be aware of, and 2 of them are potentially serious.

Switching gears from Link Administration Holdings, if you're hunting for a pristine balance sheet and premium returns, this freelist of high return, low debt companies is a great place to look.

Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.