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Does ClearView Wealth Limited's (ASX:CVW) CEO Pay Compare Well With Peers?

Simply Wall St

Simon Swanson became the CEO of ClearView Wealth Limited (ASX:CVW) in 2010. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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.

Check out our latest analysis for ClearView Wealth

How Does Simon Swanson's Compensation Compare With Similar Sized Companies?

According to our data, ClearView Wealth Limited has a market capitalization of AU$437m, and pays its CEO total annual compensation worth AU$1.1m. (This is based on the year to June 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$679k. We examined companies with market caps from AU$148m to AU$591m, and discovered that the median CEO total compensation of that group was AU$716k.

As you can see, Simon Swanson is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean ClearView Wealth Limited is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see a visual representation of the CEO compensation at ClearView Wealth, below.

ASX:CVW CEO Compensation, August 8th 2019

Is ClearView Wealth Limited Growing?

On average over the last three years, ClearView Wealth Limited has grown earnings per share (EPS) by 10% each year (using a line of best fit). In the last year, its revenue is down -23%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. You might want to check this free visual report on analyst forecasts for future earnings.

Has ClearView Wealth Limited Been A Good Investment?

Since shareholders would have lost about 24% over three years, some ClearView Wealth Limited shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

We examined the amount ClearView Wealth Limited pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

However we must not forget that the EPS growth has been very strong over three years. However, the returns to investors are far less impressive, over the same period. While EPS is positive, we'd say shareholders would want better returns before the CEO is paid much more. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling ClearView Wealth (free visualization of insider trades).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.