In 1996 Robert Kelly was appointed CEO of Steadfast Group Limited (ASX:SDF). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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 Robert Kelly's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Steadfast Group Limited has a market cap of AU$3.2b, and reported total annual CEO compensation of AU$3.6m for the year to June 2019. While we always look at total compensation first, we note that the salary component is less, at AU$982k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of AU$1.5b to AU$4.7b. The median total CEO compensation was AU$2.0m.
It would therefore appear that Steadfast Group Limited pays Robert Kelly more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see a visual representation of the CEO compensation at Steadfast Group, below.
Is Steadfast Group Limited Growing?
Steadfast Group Limited has increased its earnings per share (EPS) by an average of 8.4% a year, over the last three years (using a line of best fit). It achieved revenue growth of 20% over the last year.
I would argue that the modest growth in revenue is a notable positive. And the modest growth in earnings per share isn't bad, either. Although we'll stop short of calling the stock a top performer, we think the company has potential. You might want to check this free visual report on analyst forecasts for future earnings.
Has Steadfast Group Limited Been A Good Investment?
I think that the total shareholder return of 70%, over three years, would leave most Steadfast Group Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We examined the amount Steadfast Group Limited pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
While we generally prefer to see stronger EPS growth, there's no arguing with the strong returns to shareholders, over the last three years. As a result of the juicy return to investors, the CEO remuneration may well be quite reasonable. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Steadfast Group.
If you want to buy a stock that is better than Steadfast Group, this free list of high return, low debt companies is a great place to look.
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