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Is BSA Limited's (ASX:BSA) CEO Salary Justified?

Simply Wall St

Nick Yates has been the CEO of BSA Limited (ASX:BSA) since 2014. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for BSA

How Does Nick Yates's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that BSA Limited has a market cap of AU$168m, and reported total annual CEO compensation of AU$676k for the year to June 2019. Notably, the salary of AU$650k is the vast majority of the CEO compensation. We looked at a group of companies with market capitalizations under AU$293m, and the median CEO total compensation was AU$381k.

Thus we can conclude that Nick Yates receives more in total compensation than the median of a group of companies in the same market, and of similar size to BSA Limited. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

The graphic below shows how CEO compensation at BSA has changed from year to year.

ASX:BSA CEO Compensation, January 27th 2020

Is BSA Limited Growing?

BSA Limited has increased its earnings per share (EPS) by an average of 81% a year, over the last three years (using a line of best fit). Its revenue is up 9.7% over last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. Shareholders might be interested in this free visualization of analyst forecasts.

Has BSA Limited Been A Good Investment?

BSA Limited has generated a total shareholder return of 22% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

We compared the total CEO remuneration paid by BSA Limited, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

However, the earnings per share growth over three years is certainly impressive. Looking at the same time period, we think that the shareholder returns are respectable. While it may be worth researching further, we don't see a problem with the CEO pay, given the good EPS growth. Shareholders may want to check for free if BSA insiders are buying or selling shares.

If you want to buy a stock that is better than BSA, 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.

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. Thank you for reading.