Peter J. Bradford became the CEO of Independence Group NL (ASX:IGO) in 2014. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Peter J. Bradford’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Independence Group NL has a market cap of AU$2.2b, and is paying total annual CEO compensation of AU$1.6m. (This figure is for the year to 2018). Notably, that’s an increase of 14% over the year before. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at AU$768k. We looked at a group of companies with market capitalizations from AU$1.4b to AU$4.5b, and the median CEO compensation was AU$2.5m.
Most shareholders would consider it a positive that Peter J. Bradford takes less compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it’s important we delve into the performance of the actual business.
You can see, below, how CEO compensation at Independence Group has changed over time.
Is Independence Group NL Growing?
Over the last three years Independence Group NL has grown its earnings per share (EPS) by an average of 1.8% per year. It achieved revenue growth of 84% over the last year.
It’s hard to interpret the strong revenue growth as anything other than a positive. With that in mind, the modestly improving EPS seems positive. I wouldn’t say this is necessarily top notch growth, but it is certainly promising.
It could be important to check this free visual depiction of what analysts expect for the future.
Has Independence Group NL Been A Good Investment?
I think that the total shareholder return of 47%, over three years, would leave most Independence Group NL shareholders smiling. So they may not be at all concerned if the CEO is paid more than is normal for companies around the same size.
Independence Group NL is currently paying its CEO below what is normal for companies of its size.
Peter J. Bradford is paid less than what is normal at similar size companies, and the total shareholder return has been pleasing over the last three years. So, while it might be nice to have better EPS growth, on our analysis the CEO compensation is quite modest. Whatever your view on compensation, you might want to check if insiders are buying or selling Independence Group shares (free trial).
Of course, the past can be informative so you might be interested in considering this analytical visualization showing the company history of earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.