In 2004 David Harrison was appointed CEO of Charter Hall Group (ASX:CHC). First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does David Harrison's Compensation Compare With Similar Sized Companies?
According to our data, Charter Hall Group has a market capitalization of AU$5.5b, and pays its CEO total annual compensation worth AU$3.7m. (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$1.4m. We examined companies with market caps from AU$2.9b to AU$9.4b, and discovered that the median CEO total compensation of that group was AU$3.4m.
So David Harrison is paid around the average of the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at Charter Hall Group has changed from year to year.
Is Charter Hall Group Growing?
On average over the last three years, Charter Hall Group has shrunk earnings per share by 1.9% each year (measured with a line of best fit). Its revenue is up 18% over last year.
The lack of earnings per share growth in the last three years is unimpressive. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.
Has Charter Hall Group Been A Good Investment?
Boasting a total shareholder return of 147% over three years, Charter Hall Group 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.
David Harrison is paid around the same as most CEOs of similar size companies.
We feel that earnings per share have been a bit disappointing, but it's nice to see positive shareholder returns over the last three years. So we think most shareholders wouldn't be too worried about CEO compensation, which is close to the median for similar sized companies. So you may want to check if insiders are buying Charter Hall Group shares with their own money (free access).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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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. Thank you for reading.