How Does NRW Holdings' (ASX:NWH) CEO Pay Compare With Company Performance?

Jules Pemberton became the CEO of NRW Holdings Limited (ASX:NWH) in 2010, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether NRW Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for NRW Holdings

Comparing NRW Holdings Limited's CEO Compensation With the industry

Our data indicates that NRW Holdings Limited has a market capitalization of AU$1.3b, and total annual CEO compensation was reported as AU$3.0m for the year to June 2020. That's a notable increase of 31% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at AU$1.2m.

In comparison with other companies in the industry with market capitalizations ranging from AU$540m to AU$2.2b, the reported median CEO total compensation was AU$1.2m. Accordingly, our analysis reveals that NRW Holdings Limited pays Jules Pemberton north of the industry median. What's more, Jules Pemberton holds AU$34m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 66% of total compensation represents salary, while the remainder of 34% is other remuneration. NRW Holdings sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

NRW Holdings Limited's Growth

NRW Holdings Limited's earnings per share (EPS) grew 26% per year over the last three years. In the last year, its revenue is up 86%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has NRW Holdings Limited Been A Good Investment?

We think that the total shareholder return of 129%, over three years, would leave most NRW Holdings Limited shareholders smiling. 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.

In Summary...

As we noted earlier, NRW Holdings pays its CEO higher than the norm for similar-sized companies belonging to the same industry. However, NRW Holdings has produced strong EPS growth and shareholder returns over the last three years. As a result of the excellent all-round performance of the company, we believe CEO compensation is fair. Given the strong history of shareholder returns, the shareholders are probably very happy with Jules's performance.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 2 warning signs for NRW Holdings that investors should look into moving forward.

Important note: NRW Holdings is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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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