In 2014 Todd Barlow was appointed CEO of Washington H. Soul Pattinson and Company Limited (ASX:SOL). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. 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 Todd Barlow's Compensation Compare With Similar Sized Companies?
According to our data, Washington H. Soul Pattinson and Company Limited has a market capitalization of AU$5.1b, and paid its CEO total annual compensation worth AU$3.1m over the year to July 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$1.4m. We examined companies with market caps from AU$3.0b to AU$9.5b, and discovered that the median CEO total compensation of that group was AU$3.4m.
So Todd Barlow is paid around the average of 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.
The graphic below shows how CEO compensation at Washington H. Soul Pattinson has changed from year to year.
Is Washington H. Soul Pattinson and Company Limited Growing?
On average over the last three years, Washington H. Soul Pattinson and Company Limited has grown earnings per share (EPS) by 11% each year (using a line of best fit). It achieved revenue growth of 28% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. You might want to check this free visual report on analyst forecasts for future earnings.
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 46% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Todd Barlow is paid around the same as most CEOs of similar size companies.
Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. So one could argue the CEO compensation is quite modest, if you consider company performance! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Washington H. Soul Pattinson (free visualization of insider trades).
If you want to buy a stock that is better than Washington H. Soul Pattinson, this free list of high return, low debt companies is a great place to look.
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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.