In 2015 Hugh Marks was appointed CEO of Nine Entertainment Co. Holdings Limited (ASX:NEC). 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 we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Hugh Marks's Compensation Compare With Similar Sized Companies?
Our data indicates that Nine Entertainment Co. Holdings Limited is worth AU$3.1b, and total annual CEO compensation was reported as AU$3.2m for the year to June 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$1.4m. We examined companies with market caps from AU$1.4b to AU$4.6b, and discovered that the median CEO total compensation of that group was AU$2.1m.
Thus we can conclude that Hugh Marks receives more in total compensation than the median of a group of companies in the same market, and of similar size to Nine Entertainment Co. Holdings Limited. However, this doesn't necessarily mean the pay is too high. 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, below, how CEO compensation at Nine Entertainment Holdings has changed over time.
Is Nine Entertainment Co. Holdings Limited Growing?
On average over the last three years, Nine Entertainment Co. Holdings Limited has grown earnings per share (EPS) by 79% each year (using a line of best fit). It achieved revenue growth of 40% over the last year.
This demonstrates that the company has been improving recently. A good result. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. You might want to check this free visual report on analyst forecasts for future earnings.
Has Nine Entertainment Co. Holdings Limited Been A Good Investment?
Most shareholders would probably be pleased with Nine Entertainment Co. Holdings Limited for providing a total return of 105% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We examined the amount Nine Entertainment Co. Holdings 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.
However we must not forget that the EPS growth has been very strong over three years. In addition, shareholders have done well over the same time period. As a result of this good performance, the CEO remuneration may well be quite reasonable. Shareholders may want to check for free if Nine Entertainment Holdings insiders are buying or selling shares.
Important note: Nine Entertainment Holdings 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.
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.
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