Yahoo Finance It's Unlikely That Origin Energy Limited's (ASX:ORG) CEO Will See A Huge Pay Rise This Year
Shareholders of Origin Energy Limited (ASX:ORG) will have been dismayed by the negative share price return over the last three years. Per share earnings growth is also lacking, despite revenue growth. Shareholders will have a chance to take their concerns to the board at the next AGM on 18 October 2022 and vote on resolutions including executive compensation, which studies show may have an impact on company performance. We think shareholders may be cautious of approving a pay rise for the CEO at the moment, based on our analysis below.
View our latest analysis for Origin Energy
How Does Total Compensation For Frank Calabria Compare With Other Companies In The Industry?
At the time of writing, our data shows that Origin Energy Limited has a market capitalization of AU$9.5b, and reported total annual CEO compensation of AU$5.5m for the year to June 2022. That's just a smallish increase of 6.4% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at AU$1.9m.
For comparison, other companies in the same industry with market capitalizations ranging between AU$6.3b and AU$19b had a median total CEO compensation of AU$2.5m. Accordingly, our analysis reveals that Origin Energy Limited pays Frank Calabria north of the industry median. What's more, Frank Calabria holds AU$7.4m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2022 | 2021 | Proportion (2022) |
Salary | AU$1.9m | AU$1.8m | 34% |
Other | AU$3.6m | AU$3.4m | 66% |
Total Compensation | AU$5.5m | AU$5.2m | 100% |
Speaking on an industry level, nearly 63% of total compensation represents salary, while the remainder of 37% is other remuneration. It's interesting to note that Origin Energy allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Origin Energy Limited's Growth
Origin Energy Limited has reduced its earnings per share by 100% a year over the last three years. In the last year, its revenue is up 20%.
The reduction in EPS, over three years, is arguably concerning. On the other hand, the strong revenue growth suggests the business is growing. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is 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 Origin Energy Limited Been A Good Investment?
Given the total shareholder loss of 22% over three years, many shareholders in Origin Energy Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
The loss to shareholders over the past three years is certainly concerning and possibly has something to do with the fact that the company's earnings haven't grown. In the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan is in line with their expectations.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Origin Energy that you should be aware of before investing.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
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