The performance at Advance NanoTek Limited (ASX:ANO) has been rather lacklustre of late and shareholders may be wondering what CEO Geoff Acton is planning to do about this. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 05 November 2021. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. In our opinion, CEO compensation does not look excessive and we discuss why.

See our latest analysis for Advance NanoTek

How Does Total Compensation For Geoff Acton Compare With Other Companies In The Industry?

At the time of writing, our data shows that Advance NanoTek Limited has a market capitalization of AU$215m, and reported total annual CEO compensation of AU$246k for the year to June 2021. That's a notable increase of 33% on last year. In particular, the salary of AU$240.0k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations ranging from AU$133m to AU$533m, the reported median CEO total compensation was AU$538k. That is to say, Geoff Acton is paid under the industry median. Furthermore, Geoff Acton directly owns AU$1.3m worth of shares in the company, implying that they are deeply invested in the company's success.

Component 2021 2020 Proportion (2021) Salary AU$240k AU$185k 97% Other AU$6.2k - 3% Total Compensation AU$246k AU$185k 100%

On an industry level, roughly 65% of total compensation represents salary and 35% is other remuneration. Advance NanoTek has gone down a largely traditional route, paying Geoff Acton a high salary, giving it preference over non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance. ceo-compensation

A Look at Advance NanoTek Limited's Growth Numbers



Over the last three years, Advance NanoTek Limited has shrunk its earnings per share by 78% per year. Its revenue is down 60% over the previous year.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Advance NanoTek Limited Been A Good Investment?

Boasting a total shareholder return of 296% over three years, Advance NanoTek Limited 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...

Geoff receives almost all of their compensation through a salary. Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean these strong returns may not continue. These are are some concerns that shareholders may want to address the board when they revisit their investment thesis.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Advance NanoTek that investors should think about before committing capital to this stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this freelist of interesting companies.

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.

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