Peter Allen became the CEO of Scentre Group (ASX: SCG) in 2014. This report will first examine CEO compensation levels compared to CEO compensation in companies of similar size. Then we will consider the growth that the company is demonstrating. Finally, we will reflect on the performance of ordinary shareholders in recent years, as a secondary measure of performance. This process should give us an idea of how well the CEO is paid.
See our latest analysis for Scentre Group
How does Peter Allen’s compensation compare to that of companies of similar size?
Our data indicates that Scentre Group is worth A $ 11 billion, and the CEO’s total annual compensation has been reported at A $ 7.2 million for the year through December 2019. This is less than the compensation of the CEO. ‘last year. Although we always look at total compensation first, we note that the salary component is lower, at A $ 2.0 million. We note that more than half of total compensation is not salary; and performance requirements may apply to this non-salary portion. As part of our analysis, we examined companies in the same territory, with market capitalizations of AU $ 6.3 billion to AU $ 19 billion. The CEO’s total median compensation was AU $ 4.5 million.
The composition of the compensation tells us a lot about how a company works in relation to the industry as a whole, and it is no different in the case of Scentre Group. At the industry level, around 45% of total compensation represents wages and 55% other compensation. It is interesting to note that the Scentre Group allocates a smaller portion of compensation to wages than the industry in general.
It would therefore seem that the Scentre Group pays Peter Allen more than the median compensation of the CEO in companies of similar size, in the same market. However, this fact alone does not mean that the remuneration is too high. A closer look at the performance of the underlying business will tell us if the salary is particularly generous. You can see below a visual representation of the compensation of the CEOs of the Scentre group.
Is the Scentre group growing?
Over the past three years, Scentre Group has reduced earnings per share by 28% per year on average (measured with a line of best fit). The last twelve months of income were about the same as the previous period.
Unfortunately for shareholders, earnings per share are actually down over three years. And the flat income hardly impresses. These factors suggest that the performance of the company would not really justify a high compensation package for the CEO. Shareholders may be interested in this free viewing analyst forecasts.
Was the Scentre group a good investment?
As the shareholders would have lost about 46% over three years, some shareholders of the Scentre group would surely feel negative emotions. It could therefore be overwhelming for shareholders if the CEO was paid generously.
We compared the total compensation of the CEO paid by Scentre Group and compared it to the compensation of a group of companies of similar size. As discussed above, we discovered that the company pays more than the median for this group.
Earnings per share have not increased in three years and revenue growth does not impress us. Equally bad, share price gains for investors did not materialize in the same period. In our opinion, the CEO could be paid too generously! The gear shift of the CEO pays a second, we spotted 5 warning signs for Scentre Group you should be aware, and 2 of them are of concern.
Of course, you could find a fantastic investment by looking elsewhere. So take a look at that free list of interesting companies.
If you spot an error that merits correction, please contact the publisher at [email protected] This Simply Wall St article is general in nature. It does not constitute a recommendation to buy or sell securities and does not take into account your objectives or your financial situation. Simply Wall St has no position in the stocks mentioned.
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