In 2016 Greg Bader was appointed CEO of Rent.com.au Limited (ASX:RNT). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
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How Does Greg Bader’s Compensation Compare With Similar Sized Companies?
Our data indicates that Rent.com.au Limited is worth AU$11m, and total annual CEO compensation is AU$328k. (This figure is for the year to 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at AU$222k. We looked at a group of companies with market capitalizations under AU$280m, and the median CEO compensation was AU$365k.
So Greg Bader receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at Rent.com.au has changed from year to year.
Is Rent.com.au Limited Growing?
Rent.com.au Limited has increased its earnings per share (EPS) by an average of 51% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 41%.
This demonstrates that the company has been improving recently. A good result. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see.
Although we don’t have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Rent.com.au Limited Been A Good Investment?
With a three year total loss of 78%, Rent.com.au Limited would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
Greg Bader is paid around the same as most CEOs of similar size companies.
We think that the EPS growth is very pleasing, but it’s disappointing to see negative shareholder returns over three years. We’d be surprised if shareholders want to see a pay rise for the CEO, but we’d stop short of calling their pay too generous. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Rent.com.au (free visualization of insider trades).
Or you could feast your eyes on this interactive graph depicting past earnings, cash flow and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.