This article will reflect on the compensation paid to David Harrison who has served as CEO of Charter Hall Group (ASX:CHC) since 2004. This analysis will also assess whether Charter Hall Group pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Note: The company does not report funds from operations, and as a result, we have used earnings per share in our analysis.
Comparing Charter Hall Group's CEO Compensation With the industry
According to our data, Charter Hall Group has a market capitalization of AU$5.7b, and paid its CEO total annual compensation worth AU$4.8m over the year to June 2020. That's a fairly small increase of 6.5% over the previous year. While we always look at total compensation first, our analysis shows that the salary component is less, at AU$1.5m.
On comparing similar companies from the same industry with market caps ranging from AU$2.9b to AU$9.1b, we found that the median CEO total compensation was AU$5.0m. From this we gather that David Harrison is paid around the median for CEOs in the industry. Moreover, David Harrison also holds AU$17m worth of Charter Hall Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, roughly 51% of total compensation represents salary and 49% is other remuneration. Charter Hall Group sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at Charter Hall Group's Growth Numbers
Charter Hall Group has seen its earnings per share (EPS) increase by 6.9% a year over the past three years. In the last year, its revenue is up 38%.
It's great to see that revenue growth is strong. And in that context, the modest EPS improvement certainly isn't shabby. We'd stop short of saying the business performance is amazing, but there are enough positives to justify further research, or even adding the stock to your watch-list. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Charter Hall Group Been A Good Investment?
We think that the total shareholder return of 136%, over three years, would leave most Charter Hall Group shareholders smiling. 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.
As we noted earlier, Charter Hall Group pays its CEO in line with similar-sized companies belonging to the same industry. But the business isn't reporting great numbers in terms of EPS growth. At the same time, shareholder returns have remained strong over the same period. There is room for improved company performance, but we don't see the CEO compensation as a big issue here.
While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for Charter Hall Group that investors should be aware of in a dynamic business environment.
Switching gears from Charter Hall Group, 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email firstname.lastname@example.org.