Scott Charlton has been the CEO of Transurban Group (ASX:TCL) since 2012. This analysis aims first to contrast CEO compensation with other large companies. 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 Scott Charlton's Compensation Compare With Similar Sized Companies?
Our data indicates that Transurban Group is worth AU$41b, and total annual CEO compensation was reported as AU$7.2m for the year to June 2019. That's a modest increase of 1.6% on the prior year year. While we always look at total compensation first, we note that the salary component is less, at AU$2.3m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. When we examined a group of companies with market caps over AU$12b, we found that their median CEO total compensation was AU$5.6m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts - even though some are quite a bit bigger than others).
So Scott Charlton receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
You can see, below, how CEO compensation at Transurban Group has changed over time.
Is Transurban Group Growing?
Over the last three years Transurban Group has grown its earnings per share (EPS) by an average of 17% per year (using a line of best fit). Its revenue is up 26% over 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. It could be important to check this free visual depiction of what analysts expect for the future.
Has Transurban Group Been A Good Investment?
Boasting a total shareholder return of 72% over three years, Transurban Group has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Remuneration for Scott Charlton is close enough to the median pay for a CEO of a large company .
The company is growing earnings per share and total shareholder returns have been pleasing. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. Whatever your view on compensation, you might want to check if insiders are buying or selling Transurban Group shares (free trial).
If you want to buy a stock that is better than Transurban Group, this free list of high return, low debt companies is a great place to look.
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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