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Does Seven Group Holdings Limited's (ASX:SVW) CEO Pay Reflect Performance?

Simply Wall St

Ryan Stokes became the CEO of Seven Group Holdings Limited (ASX:SVW) in 2015. 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 process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Seven Group Holdings

How Does Ryan Stokes's Compensation Compare With Similar Sized Companies?

According to our data, Seven Group Holdings Limited has a market capitalization of AU$6.7b, and paid its CEO total annual compensation worth AU$4.8m over the year to June 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$1.6m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We examined companies with market caps from AU$2.9b to AU$9.2b, and discovered that the median CEO total compensation of that group was AU$3.3m.

It would therefore appear that Seven Group Holdings Limited pays Ryan Stokes 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. 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 Seven Group Holdings, below.

ASX:SVW CEO Compensation, January 5th 2020

Is Seven Group Holdings Limited Growing?

On average over the last three years, Seven Group Holdings Limited has grown earnings per share (EPS) by 31% each year (using a line of best fit). In the last year, its revenue is up 18%.

This demonstrates that the company has been improving recently. A good result. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. You might want to check this free visual report on analyst forecasts for future earnings.

Has Seven Group Holdings Limited Been A Good Investment?

Most shareholders would probably be pleased with Seven Group Holdings Limited for providing a total return of 171% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

We compared total CEO remuneration at Seven Group Holdings Limited with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.

However, the earnings per share growth over three years is certainly impressive. Even better, returns to shareholders have been plentiful, over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Seven Group Holdings (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.

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.

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. Thank you for reading.