Yahoo Finance How Should Investors React To Brickworks Limited's (ASX:BKW) CEO Pay?
Lindsay Partridge is the CEO of Brickworks Limited (ASX:BKW). First, this article will compare CEO compensation with compensation at similar sized 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 method should give us information to assess how appropriately the company pays the CEO.
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Check out our latest analysis for Brickworks
How Does Lindsay Partridge's Compensation Compare With Similar Sized Companies?
According to our data, Brickworks Limited has a market capitalization of AU$2.4b, and pays its CEO total annual compensation worth AU$1.5m. (This figure is for the year to July 2018). It is worth noting that the CEO compensation consists almost entirely of the salary, worth AU$1.5m. When we examined a selection of companies with market caps ranging from AU$1.0b to AU$3.2b, we found the median CEO total compensation was AU$1.6m.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.
You can see, below, how CEO compensation at Brickworks has changed over time.
Is Brickworks Limited Growing?
On average over the last three years, Brickworks Limited has grown earnings per share (EPS) by 29% each year (using a line of best fit). It achieved revenue growth of 12% over the last year.
This demonstrates that the company has been improving recently. A good result. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Shareholders might be interested in this free visualization of analyst forecasts.
Has Brickworks Limited Been A Good Investment?
Brickworks Limited has served shareholders reasonably well, with a total return of 16% 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.
In Summary...
It looks like Brickworks Limited pays its CEO less than similar sized companies. Considering the underlying business is growing earnings, this would suggest the pay is modest. While some might be keen on seeing higher returns, our short analysis has not produced any evidence to suggest Lindsay Partridge is overcompensated.
Few would complain about reasonable CEO remuneration when the business is growing earnings per share. But for me, it's even better if insiders are also buying shares with their own cold, hard, cash. Whatever your view on compensation, you might want to check if insiders are buying or selling Brickworks shares (free trial).
If you want to buy a stock that is better than Brickworks, this free list of high return, low debt companies is a great place to look.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
