Dominic Stevens has been the CEO of ASX Limited (ASX:ASX) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether ASX pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
See our latest analysis for ASX
Comparing ASX Limited's CEO Compensation With the industry
According to our data, ASX Limited has a market capitalization of AU$16b, and paid its CEO total annual compensation worth AU$4.1m over the year to June 2020. That's just a smallish increase of 4.0% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at AU$2.0m.
In comparison with other companies in the industry with market capitalizations over AU$11b , the reported median total CEO compensation was AU$9.2m. This suggests that Dominic Stevens is paid below the industry median. Furthermore, Dominic Stevens directly owns AU$5.8m worth of shares in the company, implying that they are deeply invested in the company's success.
On an industry level, around 67% of total compensation represents salary and 33% is other remuneration. It's interesting to note that ASX allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
ASX Limited's Growth
ASX Limited has seen its earnings per share (EPS) increase by 4.7% a year over the past three years. Revenue was pretty flat on last year.
We're not particularly impressed by the revenue growth, but we're happy with the modest EPS growth. Considering these factors we'd say performance has been pretty decent, though not amazing. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has ASX Limited Been A Good Investment?
We think that the total shareholder return of 71%, over three years, would leave most ASX Limited 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 touched on above, ASX Limited is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. In contrast, shareholder returns have been excellent over the past three years, and that's certainly a promising trend to keep an eye on. Considering this fine result for investors, we believe CEO compensation to be apt.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 2 warning signs (and 1 which shouldn't be ignored) in ASX we think you should know about.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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.
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