How Much Is Computershare Limited (ASX:CPU) CEO Getting Paid?

Stuart Irving has been the CEO of Computershare Limited (ASX:CPU) since 2014, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Computershare.

Check out our latest analysis for Computershare

Comparing Computershare Limited's CEO Compensation With the industry

At the time of writing, our data shows that Computershare Limited has a market capitalization of AU$7.6b, and reported total annual CEO compensation of US$4.0m for the year to June 2020. That's a notable decrease of 27% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$1.3m.

On examining similar-sized companies in the industry with market capitalizations between AU$5.1b and AU$15b, we discovered that the median CEO total compensation of that group was US$4.1m. From this we gather that Stuart Irving is paid around the median for CEOs in the industry. Furthermore, Stuart Irving directly owns AU$4.2m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, around 68% of total compensation represents salary and 32% is other remuneration. It's interesting to note that Computershare allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Computershare Limited's Growth Numbers

Computershare Limited has reduced its earnings per share by 4.1% a year over the last three years. Its revenue is down 3.2% over the previous year.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Computershare Limited Been A Good Investment?

Since shareholders would have lost about 7.1% over three years, some Computershare Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

As we touched on above, Computershare Limited 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. On the other hand, EPS growth and total shareholder return have been negative for the last three years. We'd stop short of saying compensation is inappropriate, but we would understand if shareholders had questions regarding a future raise.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for Computershare that you should be aware of before investing.

Important note: Computershare 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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