Yahoo Finance How Should Investors Feel About Otto Energy Limited’s (ASX:OEL) CEO Pay?
Matthew Allen has been the CEO of Otto Energy Limited (ASX:OEL) since 2014. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for Otto Energy
How Does Matthew Allen’s Compensation Compare With Similar Sized Companies?
Our data indicates that Otto Energy Limited is worth AU$75m, and total annual CEO compensation is US$550k. (This number is for the twelve months until 2018). That’s below the compensation, last year. While we always look at total compensation first, we note that the salary component is less, at US$450k. We examined a group of similar sized companies, with market capitalizations of below AU$278m. The median CEO compensation in that group is AU$365k.
As you can see, Matthew Allen is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Otto Energy Limited is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see a visual representation of the CEO compensation at Otto Energy, below.
Is Otto Energy Limited Growing?
Over the last three years Otto Energy Limited has grown its earnings per share (EPS) by an average of 37% per year. In the last year, its revenue is up 38%.
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 Otto Energy Limited Been A Good Investment?
Boasting a total shareholder return of 58% over three years, Otto Energy Limited has done well by shareholders. This strong performance might mean some shareholders don’t mind if the CEO is paid more than is normal for a company of its size.
In Summary…
We compared the total CEO remuneration paid by Otto Energy Limited, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. On top of that, in the same period, returns to shareholders have been great. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Otto Energy.
Or you might rather take a peek at this analytical visualization of historic cash flow, earnings 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.
