Here's Why Shareholders May Want To Be Cautious With Increasing Whitehaven Coal Limited's (ASX:WHC) CEO Pay Packet

Key Insights

• Whitehaven Coal will host its Annual General Meeting on 29th of October
• CEO Paul Flynn's total compensation includes salary of AU$1.94m
• The overall pay is 42% above the industry average
• Whitehaven Coal's total shareholder return over the past three years was 206% while its EPS grew by 33% over the past three years

Under the guidance of CEO Paul Flynn, Whitehaven Coal Limited (ASX:WHC) has performed reasonably well recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 29th of October. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

See our latest analysis for Whitehaven Coal

How Does Total Compensation For Paul Flynn Compare With Other Companies In The Industry?

Our data indicates that Whitehaven Coal Limited has a market capitalization of AU$5.6b, and total annual CEO compensation was reported as AU$6.9m for the year to June 2024. Notably, that's an increase of 16% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at AU$1.9m.

For comparison, other companies in the Australian Oil and Gas industry with market capitalizations ranging between AU$3.0b and AU$9.6b had a median total CEO compensation of AU$4.9m. This suggests that Paul Flynn is paid more than the median for the industry. What's more, Paul Flynn holds AU$7.3m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	AU$1.9m	AU$1.9m	28%
Other	AU$4.9m	AU$4.1m	72%
Total Compensation	AU$6.9m	AU$5.9m	100%

Speaking on an industry level, nearly 63% of total compensation represents salary, while the remainder of 37% is other remuneration. In Whitehaven Coal's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Whitehaven Coal Limited's Growth Numbers

Whitehaven Coal Limited's earnings per share (EPS) grew 33% per year over the last three years. In the last year, its revenue is down 37%.

Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Whitehaven Coal Limited Been A Good Investment?

Boasting a total shareholder return of 206% over three years, Whitehaven Coal Limited has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 3 warning signs for Whitehaven Coal that investors should be aware of in a dynamic business environment.

Switching gears from Whitehaven Coal, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.