Andrew Barkla has been the CEO of IDP Education Limited (ASX:IEL) since 2015. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. 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.
How Does Andrew Barkla's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that IDP Education Limited has a market cap of AU$4.4b, and reported total annual CEO compensation of AU$2.3m for the year to June 2019. That's less than last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$875k. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We looked at a group of companies with market capitalizations from AU$2.9b to AU$9.4b, and the median CEO total compensation was AU$3.3m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. Though positive, it's important we delve into the performance of the actual business.
The graphic below shows how CEO compensation at IDP Education has changed from year to year.
Is IDP Education Limited Growing?
IDP Education Limited has increased its earnings per share (EPS) by an average of 18% a year, over the last three years (using a line of best fit). It achieved revenue growth of 23% over the last year.
This demonstrates that the company has been improving recently. A good result. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. You might want to check this free visual report on analyst forecasts for future earnings.
Has IDP Education Limited Been A Good Investment?
Most shareholders would probably be pleased with IDP Education Limited for providing a total return of 350% over three years. 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.
It looks like IDP Education Limited pays its CEO less than similar sized companies.
Considering the underlying business is growing earnings, this would suggest the pay is modest. The strong history of shareholder returns might even have some thinking that Andrew Barkla deserves a raise! It's not often we see shareholders do so well, and yet the CEO is paid modestly. It would be even more positive if company insiders are buying shares. Whatever your view on compensation, you might want to check if insiders are buying or selling IDP Education shares (free trial).
Important note: IDP Education may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned.
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