Graham Chipchase became the CEO of Brambles Limited (ASX:BXB) in 2017. First, this article will compare CEO compensation with compensation at other large companies. 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 process should give us an idea about how appropriately the CEO is paid.
How Does Graham Chipchase's Compensation Compare With Similar Sized Companies?
Our data indicates that Brambles Limited is worth AU$19b, and total annual CEO compensation was reported as US$2.6m for the year to June 2019. That's just a smallish increase of 4.7% on last year. We think total compensation is more important but we note that the CEO salary is lower, at US$1.7m. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be US$3.8m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
Most shareholders would consider it a positive that Graham Chipchase takes less in total compensation than the CEOs of most other large companies, leaving more for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.
The graphic below shows how CEO compensation at Brambles has changed from year to year.
Is Brambles Limited Growing?
Brambles Limited has increased its earnings per share (EPS) by an average of 3.4% a year, over the last three years (using a line of best fit). It achieved revenue growth of 3.7% over the last year.
I would argue that the improvement in revenue isn't particularly impressive, but I'm happy with the modest EPS growth. So there are some positives here, but not enough to earn high praise. It could be important to check this free visual depiction of what analysts expect for the future.
Has Brambles Limited Been A Good Investment?
Brambles Limited has served shareholders reasonably well, with a total return of 19% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
It appears that Brambles Limited remunerates its CEO below most large companies.
Graham Chipchase is paid less than what is normal at large companies, and but overall performance has left me uninspired. But on this analysis I see no issue with the CEO compensation. Shareholders may want to check for free if Brambles insiders are buying or selling shares.
Important note: Brambles 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 email@example.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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