In 2014 Shane Stephan was appointed CEO of New Hope Corporation Limited (ASX:NHC). First, this article will compare CEO compensation with compensation at similar sized companies. 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 process should give us an idea about how appropriately the CEO is paid.
How Does Shane Stephan’s Compensation Compare With Similar Sized Companies?
Our data indicates that New Hope Corporation Limited is worth AU$2.8b, and total annual CEO compensation is AU$1.9m. (This number is for the twelve months until 2018). We note that’s an increase of 18% above last year. While we always look at total compensation first, we note that the salary component is less, at AU$1.3m. We examined companies with market caps from AU$1.4b to AU$4.4b, and discovered that the median CEO compensation of that group was AU$2.5m.
That means Shane Stephan receives fairly typical remuneration for the CEO of a company that size. 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 New Hope has changed from year to year.
Is New Hope Corporation Limited Growing?
New Hope Corporation Limited has increased its earnings per share (EPS) by an average of 102% a year, over the last three years In the last year, its revenue is up 28%.
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.
Shareholders might be interested in this free visualization of analyst forecasts. .
Has New Hope Corporation Limited Been A Good Investment?
I think that the total shareholder return of 82%, over three years, would leave most New Hope Corporation Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Shane Stephan is paid around what is normal the leaders of comparable size companies.
Shareholders would surely be happy to see that shareholder returns have been great, and the earnings per share are up. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. Whatever your view on compensation, you might want to check if insiders are buying or selling New Hope shares (free trial).
Or you might prefer this data-rich interactive visualization of historic revenue and earnings.
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.