Here's Why Shareholders May Want To Be Cautious With Increasing NRW Holdings Limited's (ASX:NWH) CEO Pay Packet

CEO Jules Pemberton has done a decent job of delivering relatively good performance at NRW Holdings Limited (ASX:NWH) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 09 November 2022. However, some shareholders may still want to keep CEO compensation within reason.

Check out the opportunities and risks within the AU Construction industry.

Comparing NRW Holdings Limited's CEO Compensation With The Industry

According to our data, NRW Holdings Limited has a market capitalization of AU$1.2b, and paid its CEO total annual compensation worth AU$3.2m over the year to June 2022. Notably, that's an increase of 15% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at AU$1.2m.

On examining similar-sized companies in the industry with market capitalizations between AU$625m and AU$2.5b, we discovered that the median CEO total compensation of that group was AU$1.5m. Hence, we can conclude that Jules Pemberton is remunerated higher than the industry median. What's more, Jules Pemberton holds AU$22m 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	AU$1.2m	AU$1.2m	38%
Other	AU$2.0m	AU$1.6m	62%
Total Compensation	AU$3.2m	AU$2.8m	100%

Speaking on an industry level, nearly 68% of total compensation represents salary, while the remainder of 32% is other remuneration. It's interesting to note that NRW Holdings allocates a smaller portion of compensation to salary 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 NRW Holdings Limited's Growth Numbers

NRW Holdings Limited's earnings per share (EPS) grew 36% per year over the last three years. It achieved revenue growth of 7.0% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has NRW Holdings Limited Been A Good Investment?

NRW Holdings Limited has generated a total shareholder return of 17% 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.

To Conclude...

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. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for NRW Holdings that you should be aware of before investing.

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. 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.