Yahoo Finance Why Telstra Corporation Limited’s (ASX:TLS) CEO Salary Matters To You
Andy Penn became the CEO of Telstra Corporation Limited (ASX:TLS) in 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
See our latest analysis for Telstra
How Does Andy Penn’s Compensation Compare With Similar Sized Companies?
Our data indicates that Telstra Corporation Limited is worth AU$37.3b, and total annual CEO compensation is AU$5m. That’s below the compensation, last year. We took a group of companies with market capitalizations over AU$11.3b, and calculated the median CEO compensation to be AU$6m.
So Andy Penn is paid around the average of the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.
You can see, below, how CEO compensation at Telstra has changed over time.
Is Telstra Corporation Limited Growing?
Over the last three years Telstra Corporation Limited has shrunk its earnings per share by an average of 1.5% per year. Revenue was pretty flat on last year.
The lack of earnings per share growth in the last three years is unimpressive. And the flat revenue hardly impresses. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.
It could be important to check this free visual depiction of what analysts expect for the future.
Has Telstra Corporation Limited Been A Good Investment?
With a three year total loss of 33%, Telstra Corporation Limited would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
In Summary…
Remuneration for Andy Penn is close enough to the median pay for a CEO of a large company .
After looking at EPS and total shareholder returns, it’s certainly hard to argue the company has performed well, since both metrics are down. Most would consider it prudent for the company to hold off any CEO pay rise until performance improves. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Telstra Corporation Limited (free visualization of insider trades).
Or you might prefer examine intently this intuitive graph showing past earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
