Is Shopping Centres Australasia Property Group (ASX:SCP) Overpaying Its CEO?

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Anthony Michael Mellowes became the CEO of Shopping Centres Australasia Property Group (ASX:SCP) in 2012. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Shopping Centres Australasia Property Group

How Does Anthony Michael Mellowes’s Compensation Compare With Similar Sized Companies?

Our data indicates that Shopping Centres Australasia Property Group is worth AU$2.3b, and total annual CEO compensation is AU$1.8m. (This figure is for the year to June 2018). We think total compensation is more important but we note that the CEO salary is lower, at AU$881k. We examined companies with market caps from AU$1.4b to AU$4.6b, and discovered that the median CEO total compensation of that group was AU$2.4m.

That means Anthony Michael Mellowes receives fairly typical remuneration for the CEO of a company that size. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

You can see a visual representation of the CEO compensation at Shopping Centres Australasia Property Group, below.

ASX:SCP CEO Compensation, July 5th 2019
ASX:SCP CEO Compensation, July 5th 2019

Is Shopping Centres Australasia Property Group Growing?

On average over the last three years, Shopping Centres Australasia Property Group has shrunk earnings per share by 5.5% each year (measured with a line of best fit). It achieved revenue growth of 11% over the last year.

Sadly for shareholders, earnings per share are actually down, over three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO.

Has Shopping Centres Australasia Property Group Been A Good Investment?

Shopping Centres Australasia Property Group has generated a total shareholder return of 28% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary…

Anthony Michael Mellowes is paid around the same as most CEOs of similar size companies.

The company isn’t growing earnings per share, and nor have the total returns inspired us. We’re not saying the CEO pay is too generous, but one might argue that the company should improve returns to shareholders before increasing it. Whatever your view on compensation, you might want to check if insiders are buying or selling Shopping Centres Australasia Property Group shares (free trial).

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

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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. Thank you for reading.