A Quick Analysis On Temple & Webster Group's (ASX:TPW) CEO Compensation

Mark Coulter became the CEO of Temple & Webster Group Ltd (ASX:TPW) in 2016, 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 look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Temple & Webster Group.

Check out our latest analysis for Temple & Webster Group

How Does Total Compensation For Mark Coulter Compare With Other Companies In The Industry?

According to our data, Temple & Webster Group Ltd has a market capitalization of AU$1.3b, and paid its CEO total annual compensation worth AU$811k over the year to June 2020. This means that the compensation hasn't changed much from last year. While we always look at total compensation first, our analysis shows that the salary component is less, at AU$367k.

For comparison, other companies in the same industry with market capitalizations ranging between AU$523m and AU$2.1b had a median total CEO compensation of AU$993k. From this we gather that Mark Coulter is paid around the median for CEOs in the industry. Moreover, Mark Coulter also holds AU$40m worth of Temple & Webster Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, roughly 67% of total compensation represents salary and 33% is other remuneration. In Temple & Webster 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.

Temple & Webster Group Ltd's Growth

Temple & Webster Group Ltd has seen its earnings per share (EPS) increase by 118% a year over the past three years. Its revenue is up 73% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 Temple & Webster Group Ltd Been A Good Investment?

Most shareholders would probably be pleased with Temple & Webster Group Ltd for providing a total return of 2,313% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

As we touched on above, Temple & Webster Group Ltd is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Investors would surely be happy to see that returns have been great, and that EPS is up. Although the pay is close to the industry median, overall performance is excellent, so we don't think the CEO is paid too generously. In fact, shareholders might even think the CEO deserves a raise as a reward due to the fantastic returns generated.

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 Temple & Webster Group that investors should be aware of in a dynamic business environment.

Important note: Temple & Webster Group is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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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