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In 2016 Dominic Stevens was appointed CEO of ASX Limited (ASX:ASX). 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Dominic Stevens’s Compensation Compare With Similar Sized Companies?
Our data indicates that ASX Limited is worth AU$13b, and total annual CEO compensation is AU$3.4m. (This figure is for the year to 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at AU$2.0m. When we examined a selection of companies with market caps ranging from AU$5.6b to AU$17b, we found the median CEO compensation was AU$4.1m.
That means Dominic Stevens 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 a visual representation of the CEO compensation at ASX, below.
Is ASX Limited Growing?
ASX Limited has increased its earnings per share (EPS) by an average of 3.1% a year, over the last three years (using a line of best fit). Its revenue is up 8.7% over last year.
I would argue that the improvement in revenue isn’t particularly impressive, but I’m happy with the modest EPS growth. Considering these factors I’d say performance has been pretty decent, though not amazing. Shareholders might be interested in this free visualization of analyst forecasts.
Has ASX Limited Been A Good Investment?
Most shareholders would probably be pleased with ASX Limited for providing a total return of 88% 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.
Dominic Stevens is paid around the same as most CEOs of similar size companies.
While we would like to see improved growth metrics, there is no doubt that the total returns have been great, over the last three years. So considering most shareholders would be happy, we’d say the CEO pay is appropriate. Shareholders may want to check for free if ASX insiders are buying or selling shares.
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 email@example.com. 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.