Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
Andrew Bassat has been the CEO of SEEK Limited (ASX:SEK) since 2011. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Andrew Bassat’s Compensation Compare With Similar Sized Companies?
According to our data, SEEK Limited has a market capitalization of AU$7.6b, and pays its CEO total annual compensation worth AU$5.1m. (This is based on the year to June 2018). While we always look at total compensation first, we note that the salary component is less, at AU$2.3m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of AU$5.8b to AU$17b. The median total CEO compensation was AU$4.1m.
So Andrew Bassat is paid around the average of the companies we looked at. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at SEEK has changed from year to year.
Is SEEK Limited Growing?
Over the last three years SEEK Limited has shrunk its earnings per share by an average of 40% per year (measured with a line of best fit). Its revenue is up 21% over last year.
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. It could be important to check this free visual depiction of what analysts expect for the future.
Has SEEK Limited Been A Good Investment?
Boasting a total shareholder return of 56% over three years, SEEK 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.
Andrew Bassat is paid around the same as most CEOs of similar size companies.
The company isn’t growing earnings per share, but shareholder returns have been strong over the last three years. So we doubt many are complaining about the fairly normal CEO pay. So you may want to check if insiders are buying SEEK shares with their own money (free access).
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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.