Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
Martin Ward has been the CEO of A.P. Eagers Limited (ASX:APE) since 2006. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Martin Ward’s Compensation Compare With Similar Sized Companies?
Our data indicates that A.P. Eagers Limited is worth AU$1.8b, and total annual CEO compensation is AU$1.6m. (This is based on the year to December 2018). That’s below the compensation, last year. While we always look at total compensation first, we note that the salary component is less, at AU$1.2m. We looked at a group of companies with market capitalizations from AU$1.4b to AU$4.6b, and the median CEO total compensation was AU$2.4m.
Most shareholders would consider it a positive that Martin Ward takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see a visual representation of the CEO compensation at A.P. Eagers, below.
Is A.P. Eagers Limited Growing?
Over the last three years A.P. Eagers Limited has grown its earnings per share (EPS) by an average of 1.8% per year (using a line of best fit). It achieved revenue growth of 1.3% over the last year.
I would argue that the improvement in revenue isn’t particularly impressive, but it is good to see modest EPS growth. So there are some positives here, but not enough to earn high praise. It could be important to check this free visual depiction of what analysts expect for the future.
Has A.P. Eagers Limited Been A Good Investment?
With a three year total loss of 4.2%, A.P. Eagers Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
It looks like A.P. Eagers Limited pays its CEO less than similar sized companies.
Martin Ward is paid less than CEOs of similar size companies, but growth hasn’t been particularly impressive and the total shareholder return over three years would leave many disappointed. I am not concerned by the CEO compensation, but it would be good to see improved performance before pay increases. Shareholders may want to check for free if A.P. Eagers insiders are buying or selling shares.
Important note: A.P. Eagers may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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 email@example.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.