Key Insights

• Ansell will host its Annual General Meeting on 23rd of October
• Total pay for CEO Neil Salmon includes US$814.0k salary
• The overall pay is comparable to the industry average
• Over the past three years, Ansell's EPS fell by 35% and over the past three years, the total shareholder return was 7.6%

Despite Ansell Limited's (ASX:ANN) share price growing positively in the past few years, the per-share earnings growth has not grown to investors' expectations, suggesting that there could be other factors at play driving the share price. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 23rd of October. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

Check out our latest analysis for Ansell

How Does Total Compensation For Neil Salmon Compare With Other Companies In The Industry?

At the time of writing, our data shows that Ansell Limited has a market capitalization of AU$4.5b, and reported total annual CEO compensation of US$1.8m for the year to June 2024. Notably, that's an increase of 31% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$814k.

In comparison with other companies in the Australian Medical Equipment industry with market capitalizations ranging from AU$3.0b to AU$9.6b, the reported median CEO total compensation was US$2.6m. From this we gather that Neil Salmon is paid around the median for CEOs in the industry. Moreover, Neil Salmon also holds AU$4.0m worth of Ansell stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 57% of total compensation represents salary, while the remainder of 43% is other remuneration. It's interesting to note that Ansell allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Ansell Limited's Growth

Over the last three years, Ansell Limited has shrunk its earnings per share by 35% per year. It saw its revenue drop 2.2% over the last year.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Ansell Limited Been A Good Investment?

Ansell Limited has generated a total shareholder return of 7.6% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.

In Summary...

While it's true that shareholders have owned decent returns, it's hard to overlook the lack of earnings growth and this makes us question whether these returns will continue. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 3 warning signs for Ansell that investors should be aware of in a dynamic business environment.

Important note: Ansell is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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.