Advertisement
Australia markets closed
  • ALL ORDS

    8,153.70
    +80.10 (+0.99%)
     
  • AUD/USD

    0.6500
    -0.0036 (-0.54%)
     
  • ASX 200

    7,896.90
    +77.30 (+0.99%)
     
  • OIL

    82.73
    +1.38 (+1.70%)
     
  • GOLD

    2,229.90
    +17.20 (+0.78%)
     
  • Bitcoin AUD

    108,400.29
    +568.27 (+0.53%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     

Does Boral Limited’s (ASX:BLD) CEO Pay Matter?

Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!

Mike Kane became the CEO of Boral Limited (ASX:BLD) in 2012. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for Boral

How Does Mike Kane’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Boral Limited has a market cap of AU$5.6b, and is paying total annual CEO compensation of AU$4.9m. (This is based on the year to 2018). We think total compensation is more important but we note that the CEO salary is lower, at AU$1.7m. We looked at a group of companies with market capitalizations from AU$2.8b to AU$9.0b, and the median CEO compensation was AU$3.7m.

ADVERTISEMENT

Thus we can conclude that Mike Kane receives more in total compensation than the median of a group of companies in the same market, and of similar size to Boral Limited. However, this doesn’t necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

The graphic below shows how CEO compensation at Boral has changed from year to year.

ASX:BLD CEO Compensation February 11th 19
ASX:BLD CEO Compensation February 11th 19

Is Boral Limited Growing?

On average over the last three years, Boral Limited has shrunk earnings per share by 5.1% each year (measured with a line of best fit). Its revenue is up 39% over last year.

Investors should note that, over three years, earnings per share are down. 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. You might want to check this free visual report on analyst forecasts for future earnings.

Has Boral Limited Been A Good Investment?

Given the total loss of 2.7% over three years, many shareholders in Boral Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

We compared total CEO remuneration at Boral Limited with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.

Over the last three years, shareholder returns have been downright disappointing, and the underlying business has failed to impress us. Shareholders may wish to consider further research. Although we don’t think the CEO pay is too high, it is probably more on the generous side of things. So you may want to check if insiders are buying Boral shares with their own money (free access).

Important note: Boral may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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.