Nick Grayston has been the CEO of The Warehouse Group Limited (NZSE:WHS) since 2016. 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 – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Nick Grayston’s Compensation Compare With Similar Sized Companies?
According to our data, The Warehouse Group Limited has a market capitalization of NZ$974m, and paid its CEO total annual compensation worth NZ$2.2m over the year to July 2018. We think total compensation is more important but we note that the CEO salary is lower, at NZ$1.4m. When we examined a selection of companies with market caps ranging from NZ$624m to NZ$2.5b, we found the median CEO total compensation was NZ$996k.
It would therefore appear that The Warehouse Group Limited pays Nick Grayston more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at Warehouse Group has changed from year to year.
Is The Warehouse Group Limited Growing?
The Warehouse Group Limited has reduced its earnings per share by an average of 24% a year, over the last three years (measured with a line of best fit). Its revenue is up 2.6% over last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the modest revenue growth over 12 months isn’t much comfort against the reduced earnings per share. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.
Has The Warehouse Group Limited Been A Good Investment?
The Warehouse Group Limited has served shareholders reasonably well, with a total return of 21% over three years. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
We compared the total CEO remuneration paid by The Warehouse Group Limited, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Neither earnings per share nor revenue have been growing sufficiently to impress us, over the last three years. And shareholder returns are decent but not great. So we doubt many shareholders would consider the CEO pay to be particularly modest! Shareholders may want to check for free if Warehouse Group insiders are buying or selling shares.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.
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. Thank you for reading.
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