We Think Shareholders May Want To Consider A Review Of James Hardie Industries plc's (ASX:JHX) CEO Compensation Package
Key Insights
- James Hardie Industries to hold its Annual General Meeting on 29th of September
- CEO Aaron Erter's total compensation includes salary of US$1.08m
- Total compensation is 213% above industry average
- James Hardie Industries' EPS declined by 20% over the past three years while total shareholder loss over the past three years was 6.6%
James Hardie Industries plc (ASX:JHX) has not performed well recently and CEO Aaron Erter will probably need to up their game. At the upcoming AGM on 29th of September, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. From our analysis, we think CEO compensation may need a review in light of the recent performance.
See our latest analysis for James Hardie Industries
How Does Total Compensation For Aaron Erter Compare With Other Companies In The Industry?
Our data indicates that James Hardie Industries plc has a market capitalization of AU$17b, and total annual CEO compensation was reported as US$9.3m for the year to March 2025. That's a notable decrease of 38% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.1m.
On comparing similar companies in the Australia Basic Materials industry with market capitalizations above AU$12b, we found that the median total CEO compensation was US$3.0m. Accordingly, our analysis reveals that James Hardie Industries plc pays Aaron Erter north of the industry median. Moreover, Aaron Erter also holds AU$912k worth of James Hardie Industries stock directly under their own name.
| Component | 2025 | 2024 | Proportion (2025) |
| Salary | US$1.1m | US$1.0m | 12% |
| Other | US$8.2m | US$14m | 88% |
| Total Compensation | US$9.3m | US$15m | 100% |
Talking in terms of the industry, salary represented approximately 75% of total compensation out of all the companies we analyzed, while other remuneration made up 25% of the pie. James Hardie Industries pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
James Hardie Industries plc's Growth
Over the last three years, James Hardie Industries plc has shrunk its earnings per share by 20% per year. In the last year, its revenue is down 4.7%.
The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has James Hardie Industries plc Been A Good Investment?
Since shareholders would have lost about 6.6% over three years, some James Hardie Industries plc investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 4 warning signs for James Hardie Industries (1 makes us a bit uncomfortable!) that you should be aware of before investing here.
Switching gears from James Hardie Industries, 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.
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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.