Here's What We Learned About The CEO Pay At Briscoe Group Limited (NZSE:BGP)

This article will reflect on the compensation paid to Rod Duke who has served as CEO of Briscoe Group Limited (NZSE:BGP) since 1991. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Briscoe Group

Comparing Briscoe Group Limited's CEO Compensation With the industry

According to our data, Briscoe Group Limited has a market capitalization of NZ$1.1b, and paid its CEO total annual compensation worth NZ$912k over the year to January 2020. That's a slightly lower by 6.8% over the previous year. We note that the salary portion, which stands at NZ$727.2k constitutes the majority of total compensation received by the CEO.

On comparing similar companies from the same industry with market caps ranging from NZ$564m to NZ$2.3b, we found that the median CEO total compensation was NZ$1.1m. So it looks like Briscoe Group compensates Rod Duke in line with the median for the industry. What's more, Rod Duke holds NZ$825m 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 71% of total compensation out of all the companies we analyzed, while other remuneration made up 29% of the pie. Briscoe Group 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.

A Look at Briscoe Group Limited's Growth Numbers

Over the last three years, Briscoe Group Limited has not seen its earnings per share change much, though there is a slight positive movement. Revenue was pretty flat on last year.

We'd prefer higher revenue growth, but the modest improvement in EPS is good. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Briscoe Group Limited Been A Good Investment?

Most shareholders would probably be pleased with Briscoe Group Limited for providing a total return of 72% 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 previously discussed, Rod is compensated close to the median for companies of its size, and which belong to the same industry. But the company has been found wanting in terms of EPS growth over the past three years. Meanwhile, shareholder returns have remained positive over the same time frame. So while shareholders shouldn't be overly concerned about CEO compensation, we suspect most would prefer to see improved performance, before a bump in pay.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 2 warning signs for Briscoe Group you should be aware of, and 1 of them makes us a bit uncomfortable.

Important note: Briscoe 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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