We Think The Compensation For AXP Energy Limited's (ASX:AXP) CEO Looks About Right

Key Insights

• AXP Energy's Annual General Meeting to take place on 29th of November

• Salary of US$150.0k is part of CEO Tim Hart's total remuneration

• The total compensation is 47% less than the average for the industry

• Over the past three years, AXP Energy's EPS grew by 61% and over the past three years, the total loss to shareholders 67%

The performance at AXP Energy Limited (ASX:AXP) has been rather lacklustre of late and shareholders may be wondering what CEO Tim Hart 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 29th of November. 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.

View our latest analysis for AXP Energy

Comparing AXP Energy Limited's CEO Compensation With The Industry

At the time of writing, our data shows that AXP Energy Limited has a market capitalization of AU$5.8m, and reported total annual CEO compensation of US$150k for the year to June 2023. We note that's a decrease of 17% compared to last year. It is worth noting that the CEO compensation consists entirely of the salary, worth US$150k.

For comparison, other companies in the Australian Oil and Gas industry with market capitalizations below AU$304m, reported a median total CEO compensation of US$283k. In other words, AXP Energy pays its CEO lower than the industry median. What's more, Tim Hart holds AU$82k worth of shares in the company in their own name.

Speaking on an industry level, nearly 62% of total compensation represents salary, while the remainder of 38% is other remuneration. Speaking on a company level, AXP Energy prefers to tread along a traditional path, disbursing all compensation through a salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

AXP Energy Limited's Growth

AXP Energy Limited has seen its earnings per share (EPS) increase by 61% a year over the past three years. Its revenue is down 4.6% over the previous year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has AXP Energy Limited Been A Good Investment?

Few AXP Energy Limited shareholders would feel satisfied with the return of -67% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

AXP Energy pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. The fact that shareholders are sitting on a loss is certainly disheartening. The share price trend has diverged with the robust growth in EPS however, suggesting there may be other factors that could be driving the price performance. There needs to be more focus by management and the board to examine why the share price has diverged from fundamentals. The upcoming AGM will provide shareholders the opportunity to raise their concerns and evaluate if the board’s judgement and decision-making is aligned with their expectations.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 2 warning signs for AXP Energy that investors should be aware of in a dynamic business environment.

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.

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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.