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Stuart Irving became the CEO of Computershare Limited (ASX:CPU) in 2014. 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 method should give us information to assess how appropriately the company pays the CEO.
How Does Stuart Irving's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Computershare Limited has a market cap of AU$10b, and is paying total annual CEO compensation of US$3.3m. (This is based on the year to June 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$954k. We looked at a group of companies with market capitalizations from US$4.0b to US$12b, and the median CEO total compensation was US$2.9m.
That means Stuart Irving receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at Computershare has changed from year to year.
Is Computershare Limited Growing?
Computershare Limited has increased its earnings per share (EPS) by an average of 24% a year, over the last three years (using a line of best fit). Its revenue is up 5.4% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. It could be important to check this free visual depiction of what analysts expect for the future.
Has Computershare Limited Been A Good Investment?
Boasting a total shareholder return of 96% over three years, Computershare Limited 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.
Stuart Irving is paid around what is normal the leaders of comparable size companies.
Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. 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 Computershare shares (free trial).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Thank you for reading.