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The performance at Waterco Limited (ASX:WAT) has been quite strong recently and CEO Soon Goh has played a role in it. Coming up to the next AGM on 27 October 2021, shareholders would be keeping this in mind. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.
Comparing Waterco Limited's CEO Compensation With the industry
According to our data, Waterco Limited has a market capitalization of AU$112m, and paid its CEO total annual compensation worth AU$454k over the year to June 2021. That's mostly flat as compared to the prior year's compensation. In particular, the salary of AU$437.5k, makes up a huge portion of the total compensation being paid to the CEO.
On comparing similar-sized companies in the industry with market capitalizations below AU$268m, we found that the median total CEO compensation was AU$365k. So it looks like Waterco compensates Soon Goh in line with the median for the industry. What's more, Soon Goh holds AU$62m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
On an industry level, around 56% of total compensation represents salary and 44% is other remuneration. Investors will find it interesting that Waterco pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at Waterco Limited's Growth Numbers
Waterco Limited's earnings per share (EPS) grew 51% per year over the last three years. In the last year, its revenue is up 20%.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Waterco Limited Been A Good Investment?
We think that the total shareholder return of 61%, over three years, would leave most Waterco Limited shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
Soon receives almost all of their compensation through a salary. The company's solid performance might have made most shareholders happy, possibly making CEO remuneration the least of the matters to be discussed in the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 2 warning signs for Waterco that investors should look into moving forward.
Switching gears from Waterco, 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.
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