Is Tabcorp Holdings Limited (ASX:TAH) Excessively Paying Its CEO?
David Robert Attenborough has been the CEO of Tabcorp Holdings Limited (ASX:TAH) since 2011. 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 – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
See our latest analysis for Tabcorp Holdings
How Does David Robert Attenborough’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Tabcorp Holdings Limited has a market cap of AU$8.6b, and is paying total annual CEO compensation of AU$4.0m. (This is based on the year to 2018). That’s a notable increase of 42% on last year. While we always look at total compensation first, we note that the salary component is less, at AU$1.6m. We examined companies with market caps from AU$5.5b to AU$16b, and discovered that the median CEO compensation of that group was AU$4.1m.
That means David Robert Attenborough receives fairly typical remuneration for the CEO of a company that size. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.
The graphic below shows how CEO compensation at Tabcorp Holdings has changed from year to year.
Is Tabcorp Holdings Limited Growing?
On average over the last three years, Tabcorp Holdings Limited has shrunk earnings per share by 97% each year. In the last year, its revenue is up 71%.
As investors, we are a bit wary of companies that have lower earnings per share, over three years. But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can’t form a strong opinion about business performance yet; but it’s one worth watching.
It could be important to check this free visual depiction of what analysts expect for the future.
Has Tabcorp Holdings Limited Been A Good Investment?
With a total shareholder return of 7.5% over three years, Tabcorp Holdings Limited has done okay by shareholders. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
In Summary…
David Robert Attenborough is paid around the same as most CEOs of similar size companies.
The company isn’t showing particularly great growth, and shareholder turns haven’t been particularly inspiring in the last few years. But we don’t think the CEO compensation is a problem. So you may want to check if insiders are buying Tabcorp Holdings shares with their own money (free access).
Or you might prefer examine intently this intuitive graph showing past 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 editorial-team@simplywallst.com.
