Yahoo Finance Most Shareholders Will Probably Find That The Compensation For OpenLearning Limited's (ASX:OLL) CEO Is Reasonable
Key Insights
OpenLearning will host its Annual General Meeting on 31st of May
Total pay for CEO Adam Brimo includes AU$250.0k salary
Total compensation is 39% below industry average
Over the past three years, OpenLearning's EPS grew by 30% and over the past three years, the total loss to shareholders 89%
Performance at OpenLearning Limited (ASX:OLL) has been rather uninspiring recently and shareholders may be wondering how CEO Adam Brimo plans to fix this. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 31st of May. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. We think CEO compensation looks appropriate given the data we have put together.
See our latest analysis for OpenLearning
How Does Total Compensation For Adam Brimo Compare With Other Companies In The Industry?
According to our data, OpenLearning Limited has a market capitalization of AU$4.3m, and paid its CEO total annual compensation worth AU$294k over the year to December 2023. That's a notable decrease of 10% on last year. In particular, the salary of AU$250.0k, makes up a huge portion of the total compensation being paid to the CEO.
On comparing similar-sized companies in the Australian Software industry with market capitalizations below AU$302m, we found that the median total CEO compensation was AU$484k. Accordingly, OpenLearning pays its CEO under the industry median. Moreover, Adam Brimo also holds AU$111k worth of OpenLearning stock directly under their own name.
Component | 2023 | 2022 | Proportion (2023) |
Salary | AU$250k | AU$250k | 85% |
Other | AU$44k | AU$78k | 15% |
Total Compensation | AU$294k | AU$328k | 100% |
Talking in terms of the industry, salary represented approximately 56% of total compensation out of all the companies we analyzed, while other remuneration made up 44% of the pie. According to our research, OpenLearning has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at OpenLearning Limited's Growth Numbers
OpenLearning Limited has seen its earnings per share (EPS) increase by 30% a year over the past three years. In the last year, its revenue is down 28%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has OpenLearning Limited Been A Good Investment?
The return of -89% over three years would not have pleased OpenLearning Limited shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
The fact that shareholders have earned a negative share price return is certainly disconcerting. This contrasts to the strong EPS growth recently however, and suggests that there may be other factors at play driving down the share price. There needs to be more focus by management and the board to examine why the share price has diverged from fundamentals. The upcoming AGM will provide shareholders the opportunity to raise their concerns and evaluate if the board’s judgement and decision-making is aligned with their expectations.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 5 warning signs for OpenLearning (4 make us uncomfortable!) that you should be aware of before investing here.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
