Here's Why Washington H. Soul Pattinson and Company Limited's (ASX:SOL) CEO Compensation Is The Least Of Shareholders' Concerns
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 10 December 2021, 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.
See our latest analysis for Washington H. Soul Pattinson
How Does Total Compensation For Todd Barlow Compare With Other Companies In The Industry?
According to our data, Washington H. Soul Pattinson and Company Limited has a market capitalization of AU$12b, and paid its CEO total annual compensation worth AU$3.0m over the year to July 2021. That's a notable decrease of 15% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at AU$1.3m.
For comparison, other companies in the same industry with market capitalizations ranging between AU$5.6b and AU$17b had a median total CEO compensation of AU$3.8m. From this we gather that Todd Barlow is paid around the median for CEOs in the industry. Moreover, Todd Barlow also holds AU$4.7m worth of Washington H. Soul Pattinson stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2021 | 2020 | Proportion (2021) |
Salary | AU$1.3m | AU$1.3m | 44% |
Other | AU$1.7m | AU$2.2m | 56% |
Total Compensation | AU$3.0m | AU$3.5m | 100% |
On an industry level, roughly 70% of total compensation represents salary and 30% is other remuneration. Washington H. Soul Pattinson pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Washington H. Soul Pattinson and Company Limited's Growth
Over the last three years, Washington H. Soul Pattinson and Company Limited has shrunk its earnings per share by 16% per year. Its revenue is up 18% over the last year.
The decrease in EPS could be a concern for some investors. But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Washington H. Soul Pattinson and Company Limited Been A Good Investment?
With a total shareholder return of 28% over three years, Washington H. Soul Pattinson and Company Limited shareholders would, in general, be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
To Conclude...
The overall company performance has been commendable, however there are still areas for improvement. Despite robust revenue growth, until EPS growth improves, shareholders may be hesitant to increase CEO pay by too much.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for Washington H. Soul Pattinson (2 can't be ignored!) that you should be aware of before investing here.
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.
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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.
