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Why We Think Ltd's (ASX:CAR) CEO Compensation Is Not Excessive At All

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·3-min read
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    Please try again later. Ltd (ASX:CAR) has exhibited strong share price growth in the past few years. However, its earnings growth has not kept up, suggesting that there may be something amiss. The upcoming AGM on 29 October 2021 may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

Check out our latest analysis for

How Does Total Compensation For Cameron McIntyre Compare With Other Companies In The Industry?

At the time of writing, our data shows that Ltd has a market capitalization of AU$7.0b, and reported total annual CEO compensation of AU$4.1m for the year to June 2021. We note that's an increase of 75% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at AU$1.5m.

For comparison, other companies in the same industry with market capitalizations ranging between AU$5.3b and AU$16b had a median total CEO compensation of AU$3.2m. This suggests that remunerates its CEO largely in line with the industry average. What's more, Cameron McIntyre holds AU$8.3m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.




Proportion (2021)









Total Compensation




Talking in terms of the industry, salary represented approximately 51% of total compensation out of all the companies we analyzed, while other remuneration made up 49% of the pie. It's interesting to note that allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.


A Look at Ltd's Growth Numbers

Over the last three years, Ltd has shrunk its earnings per share by 15% per year. In the last year, its revenue is up 8.4%.

The decline in EPS is a bit concerning. The fairly low revenue growth fails to impress given that the EPS is down. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Ltd Been A Good Investment?

Most shareholders would probably be pleased with Ltd for providing a total return of 122% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

While the return to shareholders does look promising, it's hard to ignore the lack of earnings growth and this makes us question whether these strong returns will continue. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for that investors should be aware of in a dynamic business environment.

Switching gears from, 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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