Yahoo Finance Is Orora Limited's (ASX:ORA) CEO Pay Justified?
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Nigel Garrard became the CEO of Orora Limited (ASX:ORA) in 2013. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
View our latest analysis for Orora
How Does Nigel Garrard's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Orora Limited has a market cap of AU$3.6b, and is paying total annual CEO compensation of AU$3.8m. (This is based on the year to June 2018). We think total compensation is more important but we note that the CEO salary is lower, at AU$1.3m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of AU$2.8b to AU$9.1b. The median total CEO compensation was AU$3.3m.
That means Nigel Garrard receives fairly typical remuneration for the CEO of a company that size. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
You can see a visual representation of the CEO compensation at Orora, below.
Is Orora Limited Growing?
Orora Limited has increased its earnings per share (EPS) by an average of 12% a year, over the last three years (using a line of best fit). Its revenue is up 7.1% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. You might want to check this free visual report on analyst forecasts for future earnings.
Has Orora Limited Been A Good Investment?
Orora Limited has served shareholders reasonably well, with a total return of 28% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
In Summary...
Nigel Garrard is paid around what is normal the leaders of comparable size companies.
Shareholder returns could be better but shareholders would be pleased with the positive EPS growth. So upon reflection one could argue that the CEO pay is quite reasonable. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Orora (free visualization of insider trades).
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.
