In This Article:
In 2015 Heath Sharp was appointed CEO of Reliance Worldwide Corporation Limited (ASX:RWC). 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 process should give us an idea about how appropriately the CEO is paid.
Check out our latest analysis for Reliance Worldwide
How Does Heath Sharp's Compensation Compare With Similar Sized Companies?
Our data indicates that Reliance Worldwide Corporation Limited is worth AU$3.3b, and total annual CEO compensation was reported as AU$2.9m for the year to June 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$1.5m. We examined companies with market caps from AU$1.5b to AU$4.7b, and discovered that the median CEO total compensation of that group was AU$2.1m.
Thus we can conclude that Heath Sharp receives more in total compensation than the median of a group of companies in the same market, and of similar size to Reliance Worldwide Corporation Limited. 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, below, how CEO compensation at Reliance Worldwide has changed over time.
Is Reliance Worldwide Corporation Limited Growing?
Reliance Worldwide Corporation Limited has increased its earnings per share (EPS) by an average of 55% a year, over the last three years (using a line of best fit). Its revenue is up 43% over last year.
This demonstrates that the company has been improving recently. A good result. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. You might want to check this free visual report on analyst forecasts for future earnings.
Has Reliance Worldwide Corporation Limited Been A Good Investment?
I think that the total shareholder return of 53%, over three years, would leave most Reliance Worldwide Corporation 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 examined the amount Reliance Worldwide Corporation Limited pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.