Is Austal Limited's (ASX:ASB) CEO Being Overpaid?
John Singleton became the CEO of Austal Limited (ASX:ASB) in 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for Austal
How Does John Singleton's Compensation Compare With Similar Sized Companies?
Our data indicates that Austal Limited is worth AU$1.4b, and total annual CEO compensation is AU$2.4m. (This number is for the twelve months until June 2018). While we always look at total compensation first, we note that the salary component is less, at AU$781k. When we examined a selection of companies with market caps ranging from AU$590m to AU$2.4b, we found the median CEO total compensation was AU$1.4m.
Thus we can conclude that John Singleton receives more in total compensation than the median of a group of companies in the same market, and of similar size to Austal Limited. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at Austal has changed from year to year.
Is Austal Limited Growing?
Austal Limited has increased its earnings per share (EPS) by an average of 71% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 22%.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. Shareholders might be interested in this free visualization of analyst forecasts.
Has Austal Limited Been A Good Investment?
Boasting a total shareholder return of 252% over three years, Austal 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...
We compared the total CEO remuneration paid by Austal 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.
However we must not forget that the EPS growth has been very strong over three years. In addition, shareholders have done well over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Austal.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
