Our View On Qube Holdings' (ASX:QUB) CEO Pay
Maurice James is the CEO of Qube Holdings Limited (ASX:QUB), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Check out our latest analysis for Qube Holdings
How Does Total Compensation For Maurice James Compare With Other Companies In The Industry?
Our data indicates that Qube Holdings Limited has a market capitalization of AU$5.5b, and total annual CEO compensation was reported as AU$3.9m for the year to June 2020. That's a slight decrease of 6.2% on the prior year. We think total compensation is more important but our data shows that the CEO salary is lower, at AU$1.1m.
On comparing similar companies from the same industry with market caps ranging from AU$2.7b to AU$8.6b, we found that the median CEO total compensation was AU$950k. This suggests that Maurice James is paid more than the median for the industry. Furthermore, Maurice James directly owns AU$29m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2020 | 2019 | Proportion (2020) |
Salary | AU$1.1m | AU$1.3m | 29% |
Other | AU$2.8m | AU$2.9m | 71% |
Total Compensation | AU$3.9m | AU$4.2m | 100% |
On an industry level, total compensation is equally proportioned between salary and other compensation, that is, they each represent approximately 50% of the total compensation. Qube Holdings pays a modest slice of remuneration through salary, as compared 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 Qube Holdings Limited's Growth Numbers
Earnings per share at Qube Holdings Limited are much the same as they were three years ago, albeit slightly lower. It achieved revenue growth of 10.0% over the last year.
The lack of EPS growth is certainly unimpressive. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Qube Holdings Limited Been A Good Investment?
With a total shareholder return of 22% over three years, Qube Holdings Limited shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
In Summary...
As we noted earlier, Qube Holdings pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Unfortunately, EPS has not grown in three years, failing to impress us. And shareholder returns are decent but not great. So you may want to delve deeper, because we don't think the amount Maurice makes is justifiable.
CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 4 warning signs for Qube Holdings you should be aware of, and 1 of them is significant.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
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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