In 2011 Paul White was appointed CEO of Brisbane Broncos Limited (ASX:BBL). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Paul White's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Brisbane Broncos Limited has a market cap of AU$45m, and reported total annual CEO compensation of AU$756k for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$650k. We examined a group of similar sized companies, with market capitalizations of below AU$292m. The median CEO total compensation in that group is AU$376k.
It would therefore appear that Brisbane Broncos Limited pays Paul White 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 better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Brisbane Broncos has changed over time.
Is Brisbane Broncos Limited Growing?
Over the last three years Brisbane Broncos Limited has shrunk its earnings per share by an average of 23% per year (measured with a line of best fit). It achieved revenue growth of 1.1% over the last year.
Sadly for shareholders, earnings per share are actually down, over three years. The modest increase in revenue in the last year isn't enough to make me overlook the disappointing change in earnings per share. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Brisbane Broncos Limited Been A Good Investment?
I think that the total shareholder return of 39%, over three years, would leave most Brisbane Broncos Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We compared the total CEO remuneration paid by Brisbane Broncos Limited, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Earnings per share have not grown in three years, and the revenue growth fails to impress us. On the other hand, returns have been good, so the company is doing something right. Considering this, shareholders are probably not too worried about the CEO compensation. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Brisbane Broncos.
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