Yahoo Finance What We Learned About Stockland's (ASX:SGP) CEO Compensation
This article will reflect on the compensation paid to Mark Steinert who has served as CEO of Stockland (ASX:SGP) since 2013. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Stockland.
Note: The company does not report funds from operations, and as a result, we have used earnings per share in our analysis.
See our latest analysis for Stockland
How Does Total Compensation For Mark Steinert Compare With Other Companies In The Industry?
According to our data, Stockland has a market capitalization of AU$11b, and paid its CEO total annual compensation worth AU$3.3m over the year to June 2020. That's a slight decrease of 3.1% on the prior year. We think total compensation is more important but our data shows that the CEO salary is lower, at AU$1.5m.
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$3.8m. This suggests that Stockland remunerates its CEO largely in line with the industry average. Moreover, Mark Steinert also holds AU$18m worth of Stockland stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2020 | 2019 | Proportion (2020) |
Salary | AU$1.5m | AU$1.6m | 44% |
Other | AU$1.8m | AU$1.9m | 56% |
Total Compensation | AU$3.3m | AU$3.4m | 100% |
Speaking on an industry level, nearly 51% of total compensation represents salary, while the remainder of 49% is other remuneration. In Stockland's case, non-salary compensation represents a greater slice of total remuneration, 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.
A Look at Stockland's Growth Numbers
Over the last three years, Stockland has shrunk its earnings per share by 57% per year. It achieved revenue growth of 1.4% over the last year.
The decline in EPS is a bit concerning. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Stockland Been A Good Investment?
With a total shareholder return of 18% over three years, Stockland shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
In Summary...
As we touched on above, Stockland is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. According to our analysis, Stockland is suffering from uninspiring EPS growth, and even though shareholder returns are stable, they are hardly impressive. This doesn't compare well with CEO compensation, which is close to the industry median. We would stop short of the compensation is inappropriate, but we can't say the executive is underpaid.
CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for Stockland that investors should be aware of in a dynamic business environment.
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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