This Is Why CSL Limited's (ASX:CSL) CEO Compensation Looks Appropriate
Under the guidance of CEO Paul Perreault, CSL Limited (ASX:CSL) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 11 October 2022. We present our case of why we think CEO compensation looks fair.
Check out our latest analysis for CSL
Comparing CSL Limited's CEO Compensation With The Industry
According to our data, CSL Limited has a market capitalization of AU$140b, and paid its CEO total annual compensation worth US$9.9m over the year to June 2022. That's mostly flat as compared to the prior year's compensation. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.7m.
For comparison, other companies in the industry with market capitalizations above AU$12b, reported a median total CEO compensation of US$9.9m. From this we gather that Paul Perreault is paid around the median for CEOs in the industry. What's more, Paul Perreault holds AU$48m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2022 | 2021 | Proportion (2022) |
Salary | US$1.7m | US$1.7m | 18% |
Other | US$8.1m | US$8.4m | 82% |
Total Compensation | US$9.9m | US$10m | 100% |
Talking in terms of the broader industry, salary and other compensation roughly make up 50% each, of the total compensation. In CSL's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at CSL Limited's Growth Numbers
Over the past three years, CSL Limited has seen its earnings per share (EPS) grow by 3.3% per year. Its revenue is up 2.4% over the last year.
We're not particularly impressed by the revenue growth, but it is good to see modest EPS growth. Considering these factors we'd say performance has been pretty decent, though not amazing. 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 CSL Limited Been A Good Investment?
CSL Limited has generated a total shareholder return of 22% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
In Summary...
Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. Despite the pleasing results, we still think that any proposed increases to CEO compensation will be examined based on a case by case basis and linked to performance outcomes.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 2 warning signs for CSL that investors should look into moving forward.
Switching gears from CSL, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here
