It Looks Like Charter Hall Group's (ASX:CHC) CEO May Expect Their Salary To Be Put Under The Microscope

Key Insights

• Charter Hall Group to hold its Annual General Meeting on 16th of November
• Salary of AU$1.47m is part of CEO David Harrison's total remuneration
• Total compensation is 94% above industry average
• Charter Hall Group's three-year loss to shareholders was 22% while its EPS was down 18% over the past three years

The results at Charter Hall Group (ASX:CHC) have been quite disappointing recently and CEO David Harrison bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 16th of November. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Check out our latest analysis for Charter Hall Group

How Does Total Compensation For David Harrison Compare With Other Companies In The Industry?

At the time of writing, our data shows that Charter Hall Group has a market capitalization of AU$4.7b, and reported total annual CEO compensation of AU$7.7m for the year to June 2023. That's a notable decrease of 9.5% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at AU$1.5m.

On comparing similar companies from the Australian REITs industry with market caps ranging from AU$3.1b to AU$10b, we found that the median CEO total compensation was AU$4.0m. Accordingly, our analysis reveals that Charter Hall Group pays David Harrison north of the industry median. What's more, David Harrison holds AU$12m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	AU$1.5m	AU$1.5m	19%
Other	AU$6.2m	AU$7.0m	81%
Total Compensation	AU$7.7m	AU$8.5m	100%

Talking in terms of the industry, salary represented approximately 39% of total compensation out of all the companies we analyzed, while other remuneration made up 61% of the pie. In Charter Hall Group's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Charter Hall Group's Growth Numbers

Over the last three years, Charter Hall Group has shrunk its earnings per share by 18% per year. Its revenue is down 53% over the previous year.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet 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 Charter Hall Group Been A Good Investment?

Given the total shareholder loss of 22% over three years, many shareholders in Charter Hall Group are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

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, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 1 warning sign for Charter Hall Group that investors should look into moving forward.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.