Is Brisbane Broncos Limited (ASX:BBL) Overpaying Its CEO?

Paul White has been the CEO of Brisbane Broncos Limited (ASX:BBL) since 2011. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Brisbane Broncos

How Does Paul White's Compensation Compare With Similar Sized Companies?

According to our data, Brisbane Broncos Limited has a market capitalization of AU$40m, and paid its CEO total annual compensation worth AU$756k over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at AU$650k. We looked at a group of companies with market capitalizations under AU$296m, and the median CEO total compensation was AU$374k.

As you can see, Paul White is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Brisbane Broncos Limited is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous. Although we don't have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.

You can see a visual representation of the CEO compensation at Brisbane Broncos, below.

Is Brisbane Broncos Limited Growing?

Brisbane Broncos Limited has reduced its earnings per share by an average of 23% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 1.1% over the last year.

Sadly for shareholders, earnings per share are actually down, over three years. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO.

Has Brisbane Broncos Limited Been A Good Investment?

With a total shareholder return of 3.1% over three years, Brisbane Broncos Limited has done okay by shareholders. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

We compared total CEO remuneration at Brisbane Broncos Limited with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.

Neither earnings per share nor revenue have been growing sufficiently to impress us, over the last three years. While shareholder returns are acceptable, they don't delight. So you may want to delve deeper, because we don't think the CEO pay is too low. Whatever your view on compensation, you might want to check if insiders are buying or selling Brisbane Broncos shares (free trial).

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

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