Does WiseTech Global's (ASX:WTC) CEO Salary Compare Well With The Performance Of The Company?

This article will reflect on the compensation paid to Richard White who has served as CEO of WiseTech Global Limited (ASX:WTC) since 1994. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for WiseTech Global.

See our latest analysis for WiseTech Global

Comparing WiseTech Global Limited's CEO Compensation With the industry

At the time of writing, our data shows that WiseTech Global Limited has a market capitalization of AU$10b, and reported total annual CEO compensation of AU$1.2m for the year to June 2020. That's just a smallish increase of 5.2% on last year. We note that the salary portion, which stands at AU$979.0k constitutes the majority of total compensation received by the CEO.

On examining similar-sized companies in the industry with market capitalizations between AU$5.2b and AU$16b, we discovered that the median CEO total compensation of that group was AU$5.0m. This suggests that Richard White is paid below the industry median. What's more, Richard White holds AU$280m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Talking in terms of the industry, salary represented approximately 60% of total compensation out of all the companies we analyzed, while other remuneration made up 40% of the pie. WiseTech Global is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

WiseTech Global Limited's Growth

Over the past three years, WiseTech Global Limited has seen its earnings per share (EPS) grow by 67% per year. In the last year, its revenue is up 23%.

Shareholders would be glad to know that the company has improved itself over the last few years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. 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 WiseTech Global Limited Been A Good Investment?

We think that the total shareholder return of 116%, over three years, would leave most WiseTech Global Limited shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

As previously discussed, Richard is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. Since EPS growth is heading in a positive direction; many would agree with our assessment that the pay is modest. And given most shareholders are probably very happy with recent shareholder returns, they might even think Richard deserves a raise!

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for WiseTech Global that you should be aware of before investing.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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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