We Take A Look At Whether Computershare Limited's (ASX:CPU) CEO May Be Underpaid
Key Insights
Computershare will host its Annual General Meeting on 14th of November
Salary of US$1.27m is part of CEO Stuart Irving's total remuneration
Total compensation is 50% below industry average
Computershare's total shareholder return over the past three years was 93% while its EPS grew by 20% over the past three years
The solid performance at Computershare Limited (ASX:CPU) has been impressive and shareholders will probably be pleased to know that CEO Stuart Irving has delivered. At the upcoming AGM on 14th of November, they would be interested to hear about the company strategy going forward and get a chance to cast their votes on resolutions such as executive remuneration and other company matters. Here we will show why we think CEO compensation is appropriate and discuss the case for a pay rise.
View our latest analysis for Computershare
How Does Total Compensation For Stuart Irving Compare With Other Companies In The Industry?
According to our data, Computershare Limited has a market capitalization of AU$14b, and paid its CEO total annual compensation worth US$4.2m over the year to June 2023. That is, the compensation was roughly the same as last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.3m.
For comparison, other companies in the Australian Professional Services industry with market capitalizations ranging between AU$6.2b and AU$19b had a median total CEO compensation of US$8.4m. That is to say, Stuart Irving is paid under the industry median. Moreover, Stuart Irving also holds AU$3.5m worth of Computershare stock directly under their own name.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$1.3m | US$1.4m | 30% |
Other | US$2.9m | US$2.8m | 70% |
Total Compensation | US$4.2m | US$4.2m | 100% |
On an industry level, roughly 65% of total compensation represents salary and 35% is other remuneration. In Computershare's case, non-salary compensation represents a greater slice of total remuneration, in comparison 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.
A Look at Computershare Limited's Growth Numbers
Over the past three years, Computershare Limited has seen its earnings per share (EPS) grow by 20% per year. Its revenue is up 25% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. 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 Computershare Limited Been A Good Investment?
We think that the total shareholder return of 93%, over three years, would leave most Computershare Limited shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
To Conclude...
Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. However, investors will get the chance to engage on key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for Computershare that you should be aware of before investing.
Important note: Computershare is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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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.
