Yahoo Finance Is IRESS Limited's (ASX:IRE) CEO Pay Justified?
In 2009 Andrew Walsh was appointed CEO of IRESS Limited (ASX:IRE). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
View our latest analysis for IRESS
How Does Andrew Walsh's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that IRESS Limited has a market cap of AU$2.0b, and reported total annual CEO compensation of AU$2.5m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at AU$1.0m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. When we examined a selection of companies with market caps ranging from AU$1.5b to AU$4.7b, we found the median CEO total compensation was AU$2.1m.
So Andrew Walsh is paid around the average of the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
You can see, below, how CEO compensation at IRESS has changed over time.
Is IRESS Limited Growing?
Over the last three years, IRESS Limited has not seen its earnings per share change much, though there is a positive trend. In the last year, its revenue is up 6.5%.
I'd prefer higher revenue growth, but the modest improvement in EPS is good. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. Shareholders might be interested in this free visualization of analyst forecasts.
Has IRESS Limited Been A Good Investment?
With a total shareholder return of 11% over three years, IRESS Limited shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
In Summary...
Remuneration for Andrew Walsh is close enough to the median pay for a CEO of a similar sized company .
The company isn't showing particularly great growth, and shareholder turns haven't been particularly inspiring in the last few years. While there is room for improvement, we haven't seen evidence to suggest the pay is too generous. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling IRESS (free visualization of insider trades).
Important note: IRESS 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.
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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.
