Is Computershare Limited's (ASX:CPU) CEO Salary Justified?

In this article:

Stuart Irving has been the CEO of Computershare Limited (ASX:CPU) since 2014. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for Computershare

How Does Stuart Irving's Compensation Compare With Similar Sized Companies?

According to our data, Computershare Limited has a market capitalization of AU$9.1b, and paid its CEO total annual compensation worth US$3.3m over the year to June 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$954k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. When we examined a selection of companies with market caps ranging from US$4.0b to US$12b, we found the median CEO total compensation was US$2.9m.

So Stuart Irving is paid around the average of the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

You can see a visual representation of the CEO compensation at Computershare, below.

ASX:CPU CEO Compensation, November 17th 2019
ASX:CPU CEO Compensation, November 17th 2019

Is Computershare Limited Growing?

Over the last three years Computershare Limited has grown its earnings per share (EPS) by an average of 28% per year (using a line of best fit). It achieved revenue growth of 2.5% over the last year.

This demonstrates that the company has been improving recently. A good result. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Shareholders might be interested in this free visualization of analyst forecasts.

Has Computershare Limited Been A Good Investment?

Most shareholders would probably be pleased with Computershare Limited 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.

In Summary...

Stuart Irving is paid around the same as most CEOs of similar size companies.

The company is growing earnings per share and total shareholder returns have been pleasing. Indeed, many might consider the pay rather modest, given the solid company performance! Shareholders may want to check for free if Computershare insiders are buying or selling shares.

Important note: Computershare may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.

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