How Much Did Seven Group Holdings' (ASX:SVW) CEO Pocket Last Year?
Ryan Stokes has been the CEO of Seven Group Holdings Limited (ASX:SVW) since 2015, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Seven Group Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
View our latest analysis for Seven Group Holdings
Comparing Seven Group Holdings Limited's CEO Compensation With the industry
Our data indicates that Seven Group Holdings Limited has a market capitalization of AU$7.1b, and total annual CEO compensation was reported as AU$4.1m for the year to June 2020. Notably, that's a decrease of 15% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at AU$1.6m.
For comparison, other companies in the same industry with market capitalizations ranging between AU$5.5b and AU$17b had a median total CEO compensation of AU$4.0m. From this we gather that Ryan Stokes is paid around the median for CEOs in the industry. Moreover, Ryan Stokes also holds AU$9.0m worth of Seven Group Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2020 | 2019 | Proportion (2020) |
Salary | AU$1.6m | AU$1.6m | 39% |
Other | AU$2.5m | AU$3.3m | 61% |
Total Compensation | AU$4.1m | AU$4.8m | 100% |
On an industry level, around 66% of total compensation represents salary and 34% is other remuneration. Seven Group Holdings sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Seven Group Holdings Limited's Growth Numbers
Over the last three years, Seven Group Holdings Limited has shrunk its earnings per share by 1.2% per year. In the last year, its revenue is up 12%.
The lack of EPS growth is certainly unimpressive. While the revenue growth is good to see, it is outweighed by the fact that EPS are down, over three years. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Seven Group Holdings Limited Been A Good Investment?
We think that the total shareholder return of 86%, over three years, would leave most Seven Group Holdings 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...
As we touched on above, Seven Group Holdings Limited is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. This doesn't look good when you see that EPS growth over the last three years has been negative. But on the bright side, shareholder returns have moved northward during the same period. We do not think CEO compensation is a problem, but shareholders will probably want to see an increase in EPS before agreeing the business should pay any more.
CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 3 warning signs for Seven Group Holdings that investors should look into moving forward.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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. 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.
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