Jules Pemberton became the CEO of NRW Holdings Limited (ASX:NWH) in 2010, and we think it’s a good time to look at the executive’s compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
View our latest analysis for NRW Holdings
How Does Total Compensation For Jules Pemberton Compare With Other Companies In The Industry?
Our data indicates that NRW Holdings Limited has a market capitalization of AU$934m, and total annual CEO compensation was reported as AU$3.0m for the year to June 2020. That’s a notable increase of 31% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at AU$1.2m.
On comparing similar companies from the same industry with market caps ranging from AU$545m to AU$2.2b, we found that the median CEO total compensation was AU$1.3m. Hence, we can conclude that Jules Pemberton is remunerated higher than the industry median. Furthermore, Jules Pemberton directly owns AU$20m worth of shares in the company, implying that they are deeply invested in the company’s success.
Speaking on an industry level, nearly 70% of total compensation represents salary, while the remainder of 30% is other remuneration. NRW Holdings pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
NRW Holdings Limited’s Growth
Over the past three years, NRW Holdings Limited has seen its earnings per share (EPS) grow by 26% per year. In the last year, its revenue is up 86%.
Shareholders would be glad to know that the company has improved itself over the last few years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Looking ahead, you might want to check this free visual report on analyst forecasts for the company’s future earnings..
Has NRW Holdings Limited Been A Good Investment?
Boasting a total shareholder return of 80% over three years, NRW Holdings Limited has done well by shareholders. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.
As we touched on above, NRW Holdings Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Importantly though, EPS growth and shareholder returns are very impressive over the last three years. So, in acknowledgment of the overall excellent performance, we believe CEO compensation is appropriate. The pleasing shareholder returns are the cherry on top. We wouldn’t be wrong in saying that shareholders feel that Jules’s performance creates value for the company.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That’s why we did some digging and identified 3 warning signs for NRW Holdings that you should be aware of before investing.
Important note: NRW Holdings is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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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