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Is Transurban Group's (ASX:TCL) CEO Being Overpaid?

Simply Wall St

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Scott Charlton has been the CEO of Transurban Group (ASX:TCL) since 2012. First, this article will compare CEO compensation with compensation at other large companies. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Transurban Group

How Does Scott Charlton's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Transurban Group has a market cap of AU$39b, and is paying total annual CEO compensation of AU$7.1m. (This number is for the twelve months until June 2018). While we always look at total compensation first, we note that the salary component is less, at AU$2.2m. We looked at a group of companies with market capitalizations over AU$12b and the median CEO total compensation was AU$5.1m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.

Thus we can conclude that Scott Charlton receives more in total compensation than the median of a group of large companies in the same market as Transurban Group. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see a visual representation of the CEO compensation at Transurban Group, below.

ASX:TCL CEO Compensation, June 17th 2019

Is Transurban Group Growing?

Transurban Group has increased its earnings per share (EPS) by an average of 48% a year, over the last three years (using a line of best fit). Its revenue is up 25% over last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. Shareholders might be interested in this free visualization of analyst forecasts.

Has Transurban Group Been A Good Investment?

Boasting a total shareholder return of 44% over three years, Transurban Group has done well by shareholders. 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.

In Summary...

We compared total CEO remuneration at Transurban Group with the amount paid at other large companies. Our data suggests that it pays above the median CEO pay within that group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. In addition, shareholders have done well over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Transurban Group (free visualization of insider trades).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Thank you for reading.