Yahoo Finance Is OFX Group Limited's (ASX:OFX) CEO Being Overpaid?
Skander Malcolm has been the CEO of OFX Group Limited (ASX:OFX) since 2017. First, this article will compare CEO compensation with compensation at similar sized companies. 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.
View our latest analysis for OFX Group
How Does Skander Malcolm's Compensation Compare With Similar Sized Companies?
Our data indicates that OFX Group Limited is worth AU$396m, and total annual CEO compensation was reported as AU$788k for the year to March 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$643k. We looked at a group of companies with market capitalizations from AU$149m to AU$597m, and the median CEO total compensation was AU$686k.
So Skander Malcolm receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
The graphic below shows how CEO compensation at OFX Group has changed from year to year.
Is OFX Group Limited Growing?
On average over the last three years, OFX Group Limited has shrunk earnings per share by 5.1% each year (measured with a line of best fit). In the last year, its revenue is up 8.0%.
Sadly for shareholders, earnings per share are actually down, over three years. The modest increase in revenue in the last year isn't enough to make me overlook the disappointing change in earnings per share. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.
Has OFX Group Limited Been A Good Investment?
With a three year total loss of 12%, OFX Group Limited would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary...
Remuneration for Skander Malcolm is close enough to the median pay for a CEO of a similar sized company .
Returns have been disappointing and the company is not growing its earnings per share. Few would argue that it's wise for the company to pay any more, before returns improve. So you may want to check if insiders are buying OFX Group shares with their own money (free access).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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.
