Tim Salt has been the CEO of GWA Group Limited (ASX:GWA) since 2016. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Tim Salt’s Compensation Compare With Similar Sized Companies?
Our data indicates that GWA Group Limited is worth AU$860m, and total annual CEO compensation is AU$1.9m. (This is based on the year to June 2018). We think total compensation is more important but we note that the CEO salary is lower, at AU$1.0m. We looked at a group of companies with market capitalizations from AU$564m to AU$2.3b, and the median CEO total compensation was AU$1.5m.
That means Tim Salt 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.
You can see a visual representation of the CEO compensation at GWA Group, below.
Is GWA Group Limited Growing?
GWA Group Limited has increased its earnings per share (EPS) by an average of 3.6% a year, over the last three years (using a line of best fit). It achieved revenue growth of 19% over the last year.
I would argue that the modest growth in revenue is a notable positive. And, while modest, the earnings per share growth is noticeable. So while we’d stop just short of calling this a top performer, but we think it is well worth watching. It could be important to check this free visual depiction of what analysts expect for the future.
Has GWA Group Limited Been A Good Investment?
Boasting a total shareholder return of 74% over three years, GWA Group Limited has done well by shareholders. 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.
Remuneration for Tim Salt is close enough to the median pay for a CEO of a similar sized company .
While we would like to see improved growth metrics, there is no doubt that the total returns have been great, over the last three years. So we can conclude that on this analysis the CEO compensation seems pretty sound. Shareholders may want to check for free if GWA Group insiders are buying or selling shares.
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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Thank you for reading.