Does Brisbane Broncos' (ASX:BBL) CEO Salary Compare Well With Industry Peers?

This article will reflect on the compensation paid to Paul White who has served as CEO of Brisbane Broncos Limited (ASX:BBL) since 2011. This analysis will also assess whether Brisbane Broncos pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Brisbane Broncos

Comparing Brisbane Broncos Limited's CEO Compensation With the industry

According to our data, Brisbane Broncos Limited has a market capitalization of AU$42m, and paid its CEO total annual compensation worth AU$802k over the year to December 2019. That's a modest increase of 6.0% on the prior year. We note that the salary portion, which stands at AU$700.0k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the industry with market capitalizations below AU$272m, we found that the median total CEO compensation was AU$240k. This suggests that Paul White is paid more than the median for the industry.

On an industry level, around 90% of total compensation represents salary and 10% is other remuneration. Although there is a difference in how total compensation is set, Brisbane Broncos more or less reflects the market in terms of setting the salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Brisbane Broncos Limited's Growth Numbers

Over the last three years, Brisbane Broncos Limited has shrunk its earnings per share by 24% per year. Its revenue is down 23% over the previous year.

Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Brisbane Broncos Limited Been A Good Investment?

With a three year total loss of 18% for the shareholders, Brisbane Broncos Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As we noted earlier, Brisbane Broncos pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. What's equally worrying is that the company isn't growing by our analysis. Understandably, the company's shareholders might have some questions about the CEO's remuneration, given the disappointing performance.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 3 warning signs for Brisbane Broncos (1 is significant!) that you should be aware of before investing here.

Important note: Brisbane Broncos is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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. 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.
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