Yahoo Finance Our View On Eagers Automotive's (ASX:APE) CEO Pay
Martin Ward has been the CEO of Eagers Automotive Limited (ASX:APE) since 2006, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Check out our latest analysis for Eagers Automotive
Comparing Eagers Automotive Limited's CEO Compensation With the industry
At the time of writing, our data shows that Eagers Automotive Limited has a market capitalization of AU$2.3b, and reported total annual CEO compensation of AU$2.2m for the year to December 2019. We note that's an increase of 40% above last year. We note that the salary portion, which stands at AU$1.21m constitutes the majority of total compensation received by the CEO.
On examining similar-sized companies in the industry with market capitalizations between AU$1.4b and AU$4.4b, we discovered that the median CEO total compensation of that group was AU$2.4m. From this we gather that Martin Ward is paid around the median for CEOs in the industry. Furthermore, Martin Ward directly owns AU$18m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2019 | 2018 | Proportion (2019) |
Salary | AU$1.2m | AU$1.2m | 54% |
Other | AU$1.0m | AU$384k | 46% |
Total Compensation | AU$2.2m | AU$1.6m | 100% |
Speaking on an industry level, nearly 56% of total compensation represents salary, while the remainder of 44% is other remuneration. Our data reveals that Eagers Automotive allocates salary more or less in line with the wider market. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
Eagers Automotive Limited's Growth
Over the last three years, Eagers Automotive Limited has shrunk its earnings per share by 70% per year. In the last year, its revenue is up 95%.
The decrease in EPS could be a concern for some investors. On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 Eagers Automotive Limited Been A Good Investment?
Eagers Automotive Limited has served shareholders reasonably well, with a total return of 28% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
To Conclude...
As previously discussed, Martin is compensated close to the median for companies of its size, and which belong to the same industry. But revenue growth over the last year can't be ignored. Shareholder returns, in comparison, have not been as impressive during the same period. An additional worry is EPS , which has posted negative growth in the previous three years. There's certainly room for improvement, but CEO compensation seems reasonable, considering the company's steady performance.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 3 warning signs (and 1 which is a bit concerning) in Eagers Automotive we think you should know about.
Switching gears from Eagers Automotive, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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