Matt Kay became the CEO of Beach Energy Limited (ASX:BPT) in 2016. 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 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 Matt Kay’s Compensation Compare With Similar Sized Companies?
According to our data, Beach Energy Limited has a market capitalization of AU$3.6b, and pays its CEO total annual compensation worth AU$2.4m. (This figure is for the year to 2018). That’s a notable increase of 23% on last year. We think total compensation is more important but we note that the CEO salary is lower, at AU$903k. 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$3.8m.
Most shareholders would consider it a positive that Matt Kay takes less compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it’s important we delve into the performance of the actual business. So this free visual report on analyst forecasts could hold they key to an excellent investment decision.
You can see, below, how CEO compensation at Beach Energy has changed over time.
Is Beach Energy Limited Growing?
Beach Energy Limited has increased its earnings per share (EPS) by an average of 104% a year, over the last three years In the last year, its revenue is up 92%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business.
Has Beach Energy Limited Been A Good Investment?
Boasting a total shareholder return of 296% over three years, Beach Energy Limited has done well by shareholders. This strong performance might mean some shareholders don’t mind if the CEO is paid more than is normal for a company of its size.
It appears that Beach Energy Limited remunerates its CEO below most similar sized companies. Since the business is growing, many would argue this suggests the pay is modest. And given most shareholders are probably very happy with recent returns, you might even think that Matt Kay deserves a raise!
It is relatively rare to see a modestly paid CEO when performance is so impressive. It would be even more positive if company insiders are buying shares. Whatever your view on compensation, you might want to check if insiders are buying or selling Beach Energy shares (free trial).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.