Here's Why We Think Washington H. Soul Pattinson and Company Limited's (ASX:SOL) CEO Compensation Looks Fair for the time being
CEO Todd Barlow has done a decent job of delivering relatively good performance at Washington H. Soul Pattinson and Company Limited (ASX:SOL) recently. As shareholders go into the upcoming AGM on 09 December 2022, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.
Check out our latest analysis for Washington H. Soul Pattinson
How Does Total Compensation For Todd Barlow Compare With Other Companies In The Industry?
At the time of writing, our data shows that Washington H. Soul Pattinson and Company Limited has a market capitalization of AU$10b, and reported total annual CEO compensation of AU$3.6m for the year to July 2022. We note that's an increase of 20% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at AU$1.5m.
On comparing similar companies from the same industry with market caps ranging from AU$6.0b to AU$18b, we found that the median CEO total compensation was AU$4.9m. This suggests that Washington H. Soul Pattinson remunerates its CEO largely in line with the industry average. Furthermore, Todd Barlow directly owns AU$6.0m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2022 | 2021 | Proportion (2022) |
Salary | AU$1.5m | AU$1.3m | 42% |
Other | AU$2.1m | AU$1.7m | 58% |
Total Compensation | AU$3.6m | AU$3.0m | 100% |
Speaking on an industry level, nearly 54% of total compensation represents salary, while the remainder of 46% is other remuneration. Washington H. Soul Pattinson sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Washington H. Soul Pattinson and Company Limited's Growth Numbers
Over the last three years, Washington H. Soul Pattinson and Company Limited has shrunk its earnings per share by 38% per year. Its revenue is up 119% over the last year.
Investors would be a bit wary of companies that have lower EPS But on the other hand, revenue growth is strong, suggesting a brighter future. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Washington H. Soul Pattinson and Company Limited Been A Good Investment?
Most shareholders would probably be pleased with Washington H. Soul Pattinson and Company Limited for providing a total return of 41% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary...
The overall company performance has been commendable, however there are still areas for improvement. Still, we think that until shareholders see an improvement in EPS growth, they may find it hard to justify a pay rise for the CEO.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 1 warning sign for Washington H. Soul Pattinson that investors should look into moving forward.
Switching gears from Washington H. Soul Pattinson, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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