Martin Alistair Earp became the CEO of InvoCare Limited (ASX:IVC) in 2015. 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.
View our latest analysis for InvoCare
How Does Martin Alistair Earp’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that InvoCare Limited has a market cap of AU$1.3b, and is paying total annual CEO compensation of AU$1.8m. (This figure is for the year to 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at AU$776k. When we examined a selection of companies with market caps ranging from AU$555m to AU$2.2b, we found the median CEO compensation was AU$1.7m.
That means Martin Alistair Earp receives fairly typical remuneration for the CEO of a company that size. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see, below, how CEO compensation at InvoCare has changed over time.
Is InvoCare Limited Growing?
Over the last three years InvoCare Limited has grown its earnings per share (EPS) by an average of 19% per year. Its revenue is up 1.2% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s good to see a bit of revenue growth, as this suggests the business is able to grow sustainably.
Shareholders might be interested in this free visualization of analyst forecasts. .
Has InvoCare Limited Been A Good Investment?
InvoCare Limited has not done too badly by shareholders, with a total return of 9.4%, over three years. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
In Summary…
Martin Alistair Earp is paid around what is normal the leaders of comparable size companies.
We would wish for better returns (whether dividends or capital gains) but we do admire the solid EPS growth on show here. As a result of these considerations, I would suggest the CEO pay is reasonable. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling InvoCare (free visualization of insider trades).
Or you could feast your eyes on this interactive graph depicting past earnings, cash flow and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.