Australia Markets close in 18 mins

Is OBJ Limited's (ASX:OBJ) CEO Salary Justified?

Simply Wall St

The CEO of OBJ Limited (ASX:OBJ) is Jeff Edwards. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. 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.

Check out our latest analysis for OBJ

How Does Jeff Edwards's Compensation Compare With Similar Sized Companies?

Our data indicates that OBJ Limited is worth AU$29m, and total annual CEO compensation was reported as AU$339k for the year to June 2018. We think total compensation is more important but we note that the CEO salary is lower, at AU$294k. We examined a group of similar sized companies, with market capitalizations of below AU$298m. The median CEO total compensation in that group is AU$375k.

So Jeff Edwards receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.

You can see a visual representation of the CEO compensation at OBJ, below.

ASX:OBJ CEO Compensation, October 3rd 2019

Is OBJ Limited Growing?

Over the last three years OBJ Limited has grown its earnings per share (EPS) by an average of 38% per year (using a line of best fit). It achieved revenue growth of 35% over the last year.

This demonstrates that the company has been improving recently. A good result. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Although we don't have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has OBJ Limited Been A Good Investment?

With a three year total loss of 78%, OBJ Limited would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Jeff Edwards is paid around what is normal the leaders of comparable size companies.

We'd say the company can boast of its EPS growth, but we find the returns over the last three years to be lacking. We'd be surprised if shareholders want to see a pay rise for the CEO, but we'd stop short of calling their pay too generous. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at OBJ.

If you want to buy a stock that is better than OBJ, this free list of high return, low debt companies is a great place to look.

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.

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. Thank you for reading.