Should You Worry About RedHill Education Limited's (ASX:RDH) CEO Pay Cheque?
In 2012 Glenn Elith was appointed CEO of RedHill Education Limited (ASX:RDH). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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 method should give us information to assess how appropriately the company pays the CEO.
View our latest analysis for RedHill Education
How Does Glenn Elith's Compensation Compare With Similar Sized Companies?
According to our data, RedHill Education Limited has a market capitalization of AU$57m, and paid its CEO total annual compensation worth AU$527k over the year to June 2019. While we always look at total compensation first, we note that the salary component is less, at AU$427k. We looked at a group of companies with market capitalizations under AU$291m, and the median CEO total compensation was AU$380k.
Thus we can conclude that Glenn Elith receives more in total compensation than the median of a group of companies in the same market, and of similar size to RedHill Education Limited. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at RedHill Education has changed from year to year.
Is RedHill Education Limited Growing?
RedHill Education Limited has increased its earnings per share (EPS) by an average of 42% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 9.6%.
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. It could be important to check this free visual depiction of what analysts expect for the future.
Has RedHill Education Limited Been A Good Investment?
Boasting a total shareholder return of 95% over three years, RedHill Education Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
We compared the total CEO remuneration paid by RedHill Education Limited, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. In addition, shareholders have done well over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. So you may want to check if insiders are buying RedHill Education shares with their own money (free access).
If you want to buy a stock that is better than RedHill Education, this free list of high return, low debt companies is a great place to look.
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.
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