We Discuss Whether Axis Auto Finance Inc.'s (TSE:AXIS) CEO Is Due For A Pay Rise

The impressive results at Axis Auto Finance Inc. (TSE:AXIS) recently will be great news for shareholders. At the upcoming AGM on 15 December 2022, they would be interested to hear about the company strategy going forward and get a chance to cast their votes on resolutions such as executive remuneration and other company matters. Let's take a look at why we think the CEO has done a good job and we'll present the case for a bump in pay.

View our latest analysis for Axis Auto Finance

How Does Total Compensation For Todd Hudson Compare With Other Companies In The Industry?

According to our data, Axis Auto Finance Inc. has a market capitalization of CA$59m, and paid its CEO total annual compensation worth CA$410k over the year to June 2022. We note that's a decrease of 13% compared to last year. Notably, the salary which is CA$375.0k, represents most of the total compensation being paid.

On comparing similar-sized companies in the industry with market capitalizations below CA$272m, we found that the median total CEO compensation was CA$2.5m. That is to say, Todd Hudson is paid under the industry median. Furthermore, Todd Hudson directly owns CA$4.5m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, around 23% of total compensation represents salary and 77% is other remuneration. Axis Auto Finance 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.

A Look at Axis Auto Finance Inc.'s Growth Numbers

Over the past three years, Axis Auto Finance Inc. has seen its earnings per share (EPS) grow by 86% per year. Its revenue is down 1.8% over the previous year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Axis Auto Finance Inc. Been A Good Investment?

Most shareholders would probably be pleased with Axis Auto Finance Inc. for providing a total return of 55% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for Axis Auto Finance that investors should be aware of in a dynamic business environment.

Important note: Axis Auto Finance 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.

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