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The CEO of Waterco Limited (ASX:WAT) is Soon Goh. First, this article will compare CEO compensation with compensation at similar sized companies. 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 Soon Goh’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Waterco Limited has a market cap of AU$59m, and is paying total annual CEO compensation of AU$422k. (This figure is for the year to June 2018). It is worth noting that the CEO compensation consists almost entirely of the salary, worth AU$405k. We took a group of companies with market capitalizations below AU$286m, and calculated the median CEO total compensation to be AU$354k.
That means Soon Goh receives fairly typical remuneration for the CEO of a company that size. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see, below, how CEO compensation at Waterco has changed over time.
Is Waterco Limited Growing?
On average over the last three years, Waterco Limited has grown earnings per share (EPS) by 13% each year (using a line of best fit). Its revenue is up 1.1% over last year.
This demonstrates that the company has been improving recently. A good result. It’s good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Although we don’t have analyst forecasts, you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Waterco Limited Been A Good Investment?
Boasting a total shareholder return of 48% over three years, Waterco Limited has done well by shareholders. 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.
Soon Goh is paid around the same as most CEOs of similar size companies.
Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. Indeed, many might consider the pay rather modest, given the solid company performance! So you may want to check if insiders are buying Waterco shares with their own money (free access).
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.
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.