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In 2014 Nick Yates was appointed CEO of BSA Limited (ASX:BSA). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
Check out our latest analysis for BSA
How Does Nick Yates’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that BSA Limited has a market cap of AU$108m, and is paying total annual CEO compensation of AU$776k. (This figure is for the year to 2018). While we always look at total compensation first, we note that the salary component is less, at AU$651k. We took a group of companies with market capitalizations below AU$275m, and calculated the median CEO compensation to be AU$362k.
It would therefore appear that BSA Limited pays Nick Yates more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at BSA has changed over time.
Is BSA Limited Growing?
Over the last three years BSA Limited has grown its earnings per share (EPS) by an average of 8.9% per year (using a line of best fit). Its revenue is up 14% over last year.
I would argue that the modest growth in revenue is a notable positive. And the modest growth in earnings per share isn’t bad, either. Although we’ll stop short of calling the stock a top performer, we think the company has potential. You might want to check this free visual report on analyst forecasts for future earnings.
Has BSA Limited Been A Good Investment?
I think that the total shareholder return of 45%, over three years, would leave most BSA Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary…
We compared the total CEO remuneration paid by BSA Limited, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
One might like to have seen stronger growth, but shareholder returns have been pleasing, over the last three years. Considering this fine result for investors, we daresay the CEO compensation might be apt. Whatever your view on compensation, you might want to check if insiders are buying or selling BSA shares (free trial).