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How Should Investors React To DWS Limited's (ASX:DWS) CEO Pay?

Simply Wall St

Danny Wallis has been the CEO of DWS Limited (ASX:DWS) since 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for DWS

How Does Danny Wallis's Compensation Compare With Similar Sized Companies?

According to our data, DWS Limited has a market capitalization of AU$154m, and pays its CEO total annual compensation worth AU$300k. (This number is for the twelve months until June 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$275k. We examined a group of similar sized companies, with market capitalizations of below AU$295m. The median CEO total compensation in that group is AU$353k.

That means Danny Wallis 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.

You can see, below, how CEO compensation at DWS has changed over time.

ASX:DWS CEO Compensation, August 14th 2019

Is DWS Limited Growing?

On average over the last three years, DWS Limited has shrunk earnings per share by 15% each year (measured with a line of best fit). Its revenue is up 28% over last year.

Investors should note that, over three years, earnings per share are down. 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. Although we don't have analyst forecasts, you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has DWS Limited Been A Good Investment?

DWS Limited has not done too badly by shareholders, with a total return of 5.5%, over three years. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

Danny Wallis is paid around the same as most CEOs of similar size companies.

We think many would like to see better growth. While there is room for improvement, we haven't seen evidence to suggest the pay is too generous. Whatever your view on compensation, you might want to check if insiders are buying or selling DWS shares (free trial).

Important note: DWS may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE 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 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. Thank you for reading.