Key Insights

• Australian Agricultural Projects to hold its Annual General Meeting on 30th of November

• CEO Paul Challis' total compensation includes salary of AU$140.0k

• The overall pay is 62% below the industry average

• Australian Agricultural Projects' three-year loss to shareholders was 40% while its EPS grew by 84% over the past three years

Shareholders may be wondering what CEO Paul Challis plans to do to improve the less than great performance at Australian Agricultural Projects Ltd (ASX:AAP) recently. 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 30th of November. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

Check out our latest analysis for Australian Agricultural Projects

How Does Total Compensation For Paul Challis Compare With Other Companies In The Industry?

According to our data, Australian Agricultural Projects Ltd has a market capitalization of AU$5.5m, and paid its CEO total annual compensation worth AU$158k over the year to June 2023. This means that the compensation hasn't changed much from last year. In particular, the salary of AU$140.0k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the Australian Food industry with market capitalizations below AU$304m, we found that the median total CEO compensation was AU$418k. This suggests that Paul Challis is paid below the industry median. What's more, Paul Challis holds AU$768k worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 71% of total compensation represents salary and 29% is other remuneration. Australian Agricultural Projects is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Australian Agricultural Projects Ltd's Growth

Over the past three years, Australian Agricultural Projects Ltd has seen its earnings per share (EPS) grow by 84% per year. In the last year, its revenue is up 27%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. 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?

With a total shareholder return of -40% over three years, Australian Agricultural Projects Ltd shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

The fact that shareholders are sitting on a loss is certainly disheartening. This contrasts to the strong EPS growth recently however, and suggests that there may be other factors at play driving down the share price. There needs to be more focus by management and the board to examine why the share price has diverged from fundamentals. In the upcoming AGM, shareholders will get the opportunity to discuss these concerns with the board and assess if the board's plan is likely to improve company performance.

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 5 warning signs for Australian Agricultural Projects (3 are a bit unpleasant!) that you should be aware of before investing here.

Switching gears from Australian Agricultural Projects, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.