Yahoo Finance Shareholders Will Most Likely Find OZ Minerals Limited's (ASX:OZL) CEO Compensation Acceptable
Performance at OZ Minerals Limited (ASX:OZL) has been reasonably good and CEO Andrew Cole has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 01 April 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. We present our case of why we think CEO compensation looks fair.
See our latest analysis for OZ Minerals
How Does Total Compensation For Andrew Cole Compare With Other Companies In The Industry?
Our data indicates that OZ Minerals Limited has a market capitalization of AU$7.4b, and total annual CEO compensation was reported as AU$2.9m for the year to December 2020. That's a notable increase of 18% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at AU$879k.
On examining similar-sized companies in the industry with market capitalizations between AU$5.2b and AU$16b, we discovered that the median CEO total compensation of that group was AU$3.6m. From this we gather that Andrew Cole is paid around the median for CEOs in the industry. Furthermore, Andrew Cole directly owns AU$11m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2020 | 2019 | Proportion (2020) |
Salary | AU$879k | AU$829k | 30% |
Other | AU$2.0m | AU$1.6m | 70% |
Total Compensation | AU$2.9m | AU$2.4m | 100% |
Talking in terms of the industry, salary represented approximately 69% of total compensation out of all the companies we analyzed, while other remuneration made up 31% of the pie. OZ Minerals sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
OZ Minerals Limited's Growth
Over the last three years, OZ Minerals Limited has shrunk its earnings per share by 5.5% per year. In the last year, its revenue is up 21%.
Investors would be a bit wary of companies that have lower EPS But in contrast the revenue growth is strong, suggesting future potential for EPS growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has OZ Minerals Limited Been A Good Investment?
We think that the total shareholder return of 165%, over three years, would leave most OZ Minerals Limited shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
To Conclude...
The overall company performance has been commendable, however there are still areas for improvement. Despite robust revenue growth, until EPS growth improves, shareholders may be hesitant to increase CEO pay by too much.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for OZ Minerals that you should be aware of before investing.
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.
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. 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.
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