Is Waterco Limited's (ASX:WAT) CEO Paid At A Competitive Rate?
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Soon Goh is the CEO of Waterco Limited (ASX:WAT). First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
View our latest analysis for Waterco
How Does Soon Goh's Compensation Compare With Similar Sized Companies?
Our data indicates that Waterco Limited is worth AU$61m, and total annual CEO compensation is AU$422k. (This number is for the twelve months until June 2018). It is worth noting that the CEO compensation consists almost entirely of the salary, worth AU$405k. We looked at a group of companies with market capitalizations under AU$284m, and the median CEO total compensation was AU$352k.
So Soon Goh receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at Waterco has changed from year to year.
Is Waterco Limited Growing?
Over the last three years Waterco Limited has grown its earnings per share (EPS) by an average of 13% per year (using a line of best fit). Its revenue is up 1.1% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Waterco Limited Been A Good Investment?
Boasting a total shareholder return of 55% over three years, Waterco Limited has done well by shareholders. 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...
Soon Goh is paid around what is normal the leaders of comparable size companies.
Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. Whatever your view on compensation, you might want to check if insiders are buying or selling Waterco shares (free trial).
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.
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.
