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Does Worley Limited's (ASX:WOR) CEO Salary Reflect Performance?

Andrew Wood has been the CEO of Worley Limited (ASX:WOR) since 2012. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

View our latest analysis for Worley

How Does Andrew Wood's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Worley Limited has a market cap of AU$8.3b, and reported total annual CEO compensation of AU$4.6m for the year to June 2019. We think total compensation is more important but we note that the CEO salary is lower, at AU$1.7m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We examined companies with market caps from AU$5.8b to AU$17b, and discovered that the median CEO total compensation of that group was AU$4.2m.

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So Andrew Wood receives a similar amount to the median CEO pay, amongst the companies we looked at. 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 a visual representation of the CEO compensation at Worley, below.

ASX:WOR CEO Compensation, January 14th 2020
ASX:WOR CEO Compensation, January 14th 2020

Is Worley Limited Growing?

On average over the last three years, Worley Limited has grown earnings per share (EPS) by 70% each year (using a line of best fit). Its revenue is up 43% over last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. 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 Worley Limited Been A Good Investment?

Boasting a total shareholder return of 74% over three years, Worley Limited has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Andrew Wood is paid around what is normal the leaders of comparable size companies.

Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. Indeed, many might consider the pay rather modest, given the solid company performance! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Worley (free visualization of insider trades).

Important note: Worley may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.