Does Cromwell Property Group's (ASX:CMW) CEO Pay Compare Well With Peers?

Paul Weightman became the CEO of Cromwell Property Group (ASX:CMW) in 2008. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. 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.

See our latest analysis for Cromwell Property Group

How Does Paul Weightman's Compensation Compare With Similar Sized Companies?

Our data indicates that Cromwell Property Group is worth AU$3.2b, and total annual CEO compensation was reported as AU$3.9m for the year to June 2019. While we always look at total compensation first, we note that the salary component is less, at AU$1.6m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of AU$1.5b to AU$4.8b. The median total CEO compensation was AU$2.1m.

It would therefore appear that Cromwell Property Group pays Paul Weightman 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.

The graphic below shows how CEO compensation at Cromwell Property Group has changed from year to year.

Is Cromwell Property Group Growing?

Cromwell Property Group has reduced its earnings per share by an average of 25% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is down 20%.

Few shareholders would be pleased to read that earnings per share are lower over three years. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.

Has Cromwell Property Group Been A Good Investment?

Boasting a total shareholder return of 50% over three years, Cromwell Property Group 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.

In Summary...

We compared the total CEO remuneration paid by Cromwell Property Group, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

Neither earnings per share nor revenue have been growing sufficiently to impress us, over the last three years. But clearly there are some positives, because investors have done well over the same time frame. So on this analysis we'd stop short of criticizing the level of CEO compensation. So you may want to check if insiders are buying Cromwell Property Group shares with their own money (free access).

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

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.

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