Nathan Blackburne became the CEO of Cedar Woods Properties Limited (ASX:CWP) in 2017, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
View our latest analysis for Cedar Woods Properties
Comparing Cedar Woods Properties Limited's CEO Compensation With the industry
According to our data, Cedar Woods Properties Limited has a market capitalization of AU$555m, and paid its CEO total annual compensation worth AU$973k over the year to June 2020. This means that the compensation hasn't changed much from last year. We note that the salary portion, which stands at AU$737.4k constitutes the majority of total compensation received by the CEO.
On comparing similar companies from the same industry with market caps ranging from AU$265m to AU$1.1b, we found that the median CEO total compensation was AU$751k. So it looks like Cedar Woods Properties compensates Nathan Blackburne in line with the median for the industry. What's more, Nathan Blackburne holds AU$551k worth of shares in the company in their own name.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | AU$737k | AU$652k | 76% |
| Other | AU$235k | AU$345k | 24% |
| Total Compensation | AU$973k | AU$997k | 100% |
On an industry level, around 79% of total compensation represents salary and 21% is other remuneration. There isn't a significant difference between Cedar Woods Properties and the broader market, in terms of salary allocation in the overall compensation package. 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 Cedar Woods Properties Limited's Growth Numbers
Cedar Woods Properties Limited has reduced its earnings per share by 23% a year over the last three years. Its revenue is down 30% over the previous year.
The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Cedar Woods Properties Limited Been A Good Investment?
Cedar Woods Properties Limited has served shareholders reasonably well, with a total return of 24% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
In Summary...
As previously discussed, Nathan is compensated close to the median for companies of its size, and which belong to the same industry. Cedar Woods Properties has had a poor showing when it comes to EPS growth, and it's tough to say that shareholder returns have done much to excite us. This doesn't compare well with CEO compensation, which is close to the industry median. Considering all of this, we can't say the CEO is underpaid, and moving forward shareholders will likely want to see higher growth to justify any raise.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for Cedar Woods Properties that investors should be aware of in a dynamic business environment.
Switching gears from Cedar Woods Properties, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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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About ASX:CWP
Cedar Woods Properties
Engages in property investment and development activities in Australia.
Very undervalued with flawless balance sheet.
