In 2012 Mike Kane was appointed CEO of Boral Limited (ASX:BLD). 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 we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Mike Kane's Compensation Compare With Similar Sized Companies?
According to our data, Boral Limited has a market capitalization of AU$5.3b, and paid its CEO total annual compensation worth AU$3.8m over the year to June 2019. We think total compensation is more important but we note that the CEO salary is lower, at AU$1.8m. When we examined a selection of companies with market caps ranging from AU$2.9b to AU$9.1b, we found the median CEO total compensation was AU$3.3m.
So Mike Kane receives a similar amount to the median CEO pay, amongst 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, below, how CEO compensation at Boral has changed over time.
Is Boral Limited Growing?
Over the last three years Boral Limited has grown its earnings per share (EPS) by an average of 1.6% per year (using a line of best fit). It achieved revenue growth of 4.0% over the last year.
I would argue that the improvement in revenue isn't particularly impressive, but it is good to see modest EPS growth. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. You might want to check this free visual report on analyst forecasts for future earnings.
Has Boral Limited Been A Good Investment?
Given the total loss of 5.0% over three years, many shareholders in Boral Limited are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
Mike Kane is paid around the same as most CEOs of similar size companies.
The per share growth could be better, in our view. And shareholder returns have been disappointing over the last three years. So suffice it to say we don't think the compensation is modest. Whatever your view on compensation, you might want to check if insiders are buying or selling Boral shares (free trial).
Important note: Boral 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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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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