We Think Shareholders May Consider Being More Generous With REA Group Limited's (ASX:REA) CEO Compensation Package

Shareholders will probably not be disappointed by the robust results at REA Group Limited (ASX:REA) recently and they will be keeping this in mind as they go into the AGM on 09 November 2022. This would also be a chance for them to hear the board review the financial results, discuss future company strategy to further improve the business and vote on any resolutions such as executive remuneration. Here is our take on why we think CEO compensation is fair and may even warrant a raise.

View our latest analysis for REA Group

Comparing REA Group Limited's CEO Compensation With The Industry

At the time of writing, our data shows that REA Group Limited has a market capitalization of AU$16b, and reported total annual CEO compensation of AU$4.3m for the year to June 2022. That's mostly flat as compared to the prior year's compensation. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at AU$1.6m.

In comparison with other companies in the industry with market capitalizations over AU$13b, the reported median total CEO compensation was AU$7.3m. That is to say, Owen Wilson is paid under the industry median. What's more, Owen Wilson holds AU$3.2m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2022	2021	Proportion (2022)
Salary	AU$1.6m	AU$1.4m	38%
Other	AU$2.7m	AU$3.0m	62%
Total Compensation	AU$4.3m	AU$4.4m	100%

On an industry level, around 73% of total compensation represents salary and 27% is other remuneration. REA Group pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

REA Group Limited's Growth

Over the past three years, REA Group Limited has seen its earnings per share (EPS) grow by 54% per year. It achieved revenue growth of 42% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 REA Group Limited Been A Good Investment?

With a total shareholder return of 17% over three years, REA Group Limited shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

The company's overall performance, while not bad, could be better. If it manages to keep up the current streak, CEO remuneration could well be one of shareholders' least concerns. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

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 1 warning sign for REA Group that investors should be aware of in a dynamic business environment.

Important note: REA Group 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. 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.