Andrew Bassat became the CEO of SEEK Limited (ASX:SEK) in 2011. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. This method should give us information to assess how appropriately the company pays the CEO.
Want to help shape the future of investing tools and platforms? Take the survey and be part of one of the most advanced studies of stock market investors to date.
How Does Andrew Bassat’s Compensation Compare With Similar Sized Companies?
Our data indicates that SEEK Limited is worth AU$6.1b, and total annual CEO compensation is AU$5.1m. (This number is for the twelve months until 2018). We think total compensation is more important but we note that the CEO salary is lower, at AU$2.3m. We looked at a group of companies with market capitalizations from AU$2.8b to AU$8.9b, and the median CEO compensation was AU$3.7m.
Thus we can conclude that Andrew Bassat receives more in total compensation than the median of a group of companies in the same market, and of similar size to SEEK Limited. However, this doesn’t necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous. So this free report on the analyst consensus forecasts could help you make a master move on this stock.
You can see, below, how CEO compensation at SEEK has changed over time.
Is SEEK Limited Growing?
SEEK Limited has reduced its earnings per share by an average of 17% a year, over the last three years. In the last year, its revenue is up 25%.
Sadly for shareholders, earnings per share are actually down, over three years. There’s no doubt that the silver lining is that revenue is up. But it isn’t sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO.
Has SEEK Limited Been A Good Investment?
Most shareholders would probably be pleased with SEEK Limited for providing a total return of 33% over three years. 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.
We compared total CEO remuneration at SEEK Limited with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.
On the other hand, returns have been good, so the company is doing something right. Given this situation we doubt shareholders are particularly concerned about the CEO compensation. Whatever your view on compensation, you might want to check if insiders are buying or selling SEEK shares (free trial).
Important note: SEEK may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.