Does Beach Energy Limited's (ASX:BPT) CEO Pay Compare Well With Peers?
In 2016 Matt Kay was appointed CEO of Beach Energy Limited (ASX:BPT). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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.
Check out our latest analysis for Beach Energy
How Does Matt Kay's Compensation Compare With Similar Sized Companies?
Our data indicates that Beach Energy Limited is worth AU$4.8b, and total annual CEO compensation is AU$2.4m. (This number is for the twelve months until June 2018). We think total compensation is more important but we note that the CEO salary is lower, at AU$903k. We looked at a group of companies with market capitalizations from AU$2.9b to AU$9.3b, and the median CEO total compensation was AU$3.4m.
That means Matt Kay receives fairly typical remuneration for the CEO of a company that size. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
You can see, below, how CEO compensation at Beach Energy has changed over time.
Is Beach Energy Limited Growing?
Beach Energy Limited has increased its earnings per share (EPS) by an average of 110% a year, over the last three years (using a line of best fit). Its revenue is up 173% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. You might want to check this free visual report on analyst forecasts for future earnings.
Has Beach Energy Limited Been A Good Investment?
Most shareholders would probably be pleased with Beach Energy Limited for providing a total return of 318% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
In Summary...
Matt Kay is paid around the same as most CEOs of similar size companies.
Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Beach Energy (free visualization of insider trades).
Important note: Beach Energy 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.
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.
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. Thank you for reading.
