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Dexus' (ASX:DXS) CEO Compensation Is Looking A Bit Stretched At The Moment

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·3-min read
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Performance at Dexus (ASX:DXS) has been reasonably good and CEO Darren Steinberg has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 19 October 2021. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for Dexus

Comparing Dexus' CEO Compensation With the industry

According to our data, Dexus has a market capitalization of AU$11b, and paid its CEO total annual compensation worth AU$5.2m over the year to June 2021. That's a notable increase of 22% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at AU$1.6m.

In comparison with other companies in the industry with market capitalizations ranging from AU$5.4b to AU$16b, the reported median CEO total compensation was AU$2.8m. Accordingly, our analysis reveals that Dexus pays Darren Steinberg north of the industry median. Furthermore, Darren Steinberg directly owns AU$13m worth of shares in the company, implying that they are deeply invested in the company's success.

Component

2021

2020

Proportion (2021)

Salary

AU$1.6m

AU$1.5m

30%

Other

AU$3.6m

AU$2.8m

70%

Total Compensation

AU$5.2m

AU$4.3m

100%

Speaking on an industry level, nearly 45% of total compensation represents salary, while the remainder of 55% is other remuneration. Dexus sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
ceo-compensation

Dexus' Growth

Dexus's funds from operations (FFO) grew 3.1% per yearover the last three years. It achieved revenue growth of 6.4% over the last year.

We would argue that the improvement in revenue is good, but isn't particularly impressive, but it is good to see modest FFO 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 Dexus Been A Good Investment?

Dexus has generated a total shareholder return of 18% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 3 warning signs for Dexus you should be aware of, and 1 of them shouldn't be ignored.

Switching gears from Dexus, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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