Scott Didier has been the CEO of Johns Lyng Group Limited (ASX:JLG) since 2004, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Johns Lyng Group.
See our latest analysis for Johns Lyng Group
Comparing Johns Lyng Group Limited's CEO Compensation With the industry
At the time of writing, our data shows that Johns Lyng Group Limited has a market capitalization of AU$795m, and reported total annual CEO compensation of AU$975k for the year to June 2020. That's a notable increase of 14% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at AU$480k.
On comparing similar companies from the same industry with market caps ranging from AU$518m to AU$2.1b, we found that the median CEO total compensation was AU$1.2m. This suggests that Johns Lyng Group remunerates its CEO largely in line with the industry average. Furthermore, Scott Didier directly owns AU$207m worth of shares in the company, implying that they are deeply invested in the company's success.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | AU$480k | AU$480k | 49% |
| Other | AU$495k | AU$374k | 51% |
| Total Compensation | AU$975k | AU$854k | 100% |
On an industry level, around 72% of total compensation represents salary and 28% is other remuneration. In Johns Lyng Group's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Johns Lyng Group Limited's Growth
Earnings per share at Johns Lyng Group Limited are much the same as they were three years ago, albeit with slightly higher. It achieved revenue growth of 29% over the last year.
It's great to see that revenue growth is strong. And in that context, the modest EPS improvement certainly isn't shabby. So while we'd stop short of saying growth is absolutely outstanding, there are definitely some clear positives! Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Johns Lyng Group Limited Been A Good Investment?
Boasting a total shareholder return of 169% over three years, Johns Lyng Group Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
To Conclude...
As we touched on above, Johns Lyng Group Limited is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But the business isn't reporting great numbers in terms of EPS growth. At the same time, shareholder returns have remained strong over the same period. There is room for improved company performance, but we don't see the CEO compensation as a big issue here.
If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Johns Lyng Group.
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.
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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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About ASX:JLG
Johns Lyng Group
Provides integrated building services in Australia, New Zealand, and the United States.
Excellent balance sheet and slightly overvalued.
