Magnus Nicolin has been the CEO of Ansell Limited (ASX:ANN) since 2010. 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. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Magnus Nicolin's Compensation Compare With Similar Sized Companies?
Our data indicates that Ansell Limited is worth AU$3.6b, and total annual CEO compensation was reported as US$5.3m for the year to June 2019. Notably, that's an increase of 20% over the year before. While we always look at total compensation first, we note that the salary component is less, at US$1.1m. 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$2.0b to US$6.4b, we found the median CEO total compensation was US$2.3m.
As you can see, Magnus Nicolin is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Ansell Limited is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at Ansell has changed over time.
Is Ansell Limited Growing?
Over the last three years, Ansell Limited has not seen its earnings per share change much, though they have deteriorated slightly, according to a line of best fit. Revenue was pretty flat on last year.
In the last three years the company has failed to grow earnings per share. And the flat revenue is seriously uninspiring. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.
Has Ansell Limited Been A Good Investment?
Boasting a total shareholder return of 33% over three years, Ansell 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.
We compared total CEO remuneration at Ansell Limited with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.
We think many shareholders would be underwhelmed with the business growth over the last three years. However, we can't argue with the strong returns to shareholders, over the same time period. Given this situation we doubt shareholders are particularly concerned about the CEO compensation. Shareholders may want to check for free if Ansell insiders are buying or selling shares.
If you want to buy a stock that is better than Ansell, this free list of high return, low debt companies is a great place to look.
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