Should You Worry About Ingenia Communities Group’s (ASX:INA) CEO Salary Level?
Simon Owen became the CEO of Ingenia Communities Group (ASX:INA) in 2009. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
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How Does Simon Owen’s Compensation Compare With Similar Sized Companies?
According to our data, Ingenia Communities Group has a market capitalization of AU$699m, and pays its CEO total annual compensation worth AU$1.5m. (This number is for the twelve months until 2018). While we always look at total compensation first, we note that the salary component is less, at AU$657k. We examined companies with market caps from AU$279m to AU$1.1b, and discovered that the median CEO compensation of that group was AU$1.1m.
Thus we can conclude that Simon Owen receives more in total compensation than the median of a group of companies in the same market, and of similar size to Ingenia Communities Group. However, this doesn’t necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Ingenia Communities Group has changed over time.
Is Ingenia Communities Group Growing?
Ingenia Communities Group has reduced its earnings per share by an average of 9.9% a year, over the last three years. It achieved revenue growth of 27% over the last year.
As investors, we are a bit wary of companies that have lower earnings per share, over three years. On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can’t form a strong opinion about business performance yet; but it’s one worth watching.
Shareholders might be interested in this free visualization of analyst forecasts. .
Has Ingenia Communities Group Been A Good Investment?
Ingenia Communities Group has served shareholders reasonably well, with a total return of 21% over three years. 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…
We compared the total CEO remuneration paid by Ingenia Communities Group, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
Over the last three years returns to investors have been uninspiring, and we would have liked to see stronger business growth. Considering this, we wouldn’t want to see any big pay rises, although we’d stop short of calling the CEO compensation unfair. Whatever your view on compensation, you might want to check if insiders are buying or selling Ingenia Communities Group shares (free trial).
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.
