This Is The Reason Why We Think Computershare Limited's (ASX:CPU) CEO Deserves A Bump Up To Their Compensation

Key Insights

• Computershare's Annual General Meeting to take place on 14th of November
• CEO Stuart Irving's total compensation includes salary of US$1.27m
• The total compensation is 50% less than the average for the industry
• Computershare's total shareholder return over the past three years was 93% while its EPS grew by 20% over the past three years

The solid performance at Computershare Limited (ASX:CPU) has been impressive and shareholders will probably be pleased to know that CEO Stuart Irving has delivered. At the upcoming AGM on 14th of November, they will get a chance to hear the board review the company results, discuss future strategy and cast their vote on any resolutions such as executive remuneration. Let's take a look at why we think the CEO has done a good job and we'll present the case for a bump in pay.

See our latest analysis for Computershare

Comparing Computershare Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Computershare Limited has a market capitalization of AU$14b, and reported total annual CEO compensation of US$4.2m for the year to June 2023. This means that the compensation hasn't changed much from last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.3m.

On comparing similar companies from the Australian Professional Services industry with market caps ranging from AU$6.2b to AU$19b, we found that the median CEO total compensation was US$8.4m. Accordingly, Computershare pays its CEO under the industry median. What's more, Stuart Irving holds AU$3.5m worth of shares in the company in their own name.

Component	2023	2022	Proportion (2023)
Salary	US$1.3m	US$1.4m	30%
Other	US$2.9m	US$2.8m	70%
Total Compensation	US$4.2m	US$4.2m	100%

On an industry level, roughly 65% of total compensation represents salary and 35% is other remuneration. Computershare pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Computershare Limited's Growth

Computershare Limited has seen its earnings per share (EPS) increase by 20% a year over the past three years. Its revenue is up 25% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Computershare Limited Been A Good Investment?

Most shareholders would probably be pleased with Computershare Limited for providing a total return of 93% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 2 warning signs for Computershare that investors should be aware of in a dynamic business environment.

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.