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Why OBJ Limited's (ASX:OBJ) CEO Pay Matters To You

Simply Wall St

The CEO of OBJ Limited (ASX:OBJ) is Jeff Edwards. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for OBJ

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

According to our data, OBJ Limited has a market capitalization of AU$33m, and pays its CEO total annual compensation worth AU$339k. (This figure is for the year to June 2018). While we always look at total compensation first, we note that the salary component is less, at AU$294k. We took a group of companies with market capitalizations below AU$282m, and calculated the median CEO total compensation to be AU$356k.

So Jeff Edwards is paid around the average of the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

The graphic below shows how CEO compensation at OBJ has changed from year to year.

ASX:OBJ CEO Compensation, April 25th 2019

Is OBJ Limited Growing?

Over the last three years OBJ Limited has grown its earnings per share (EPS) by an average of 31% per year (using a line of best fit). It saw its revenue drop -26% over the last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 75%, OBJ Limited would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

Remuneration for Jeff Edwards is close enough to the median pay for a CEO of a similar sized company .

We think that the EPS growth is very pleasing, but it's disappointing to see negative shareholder returns over three years. Considering the the positives we don't think the CEO pays is too high, but it's certainly hard to argue it is too low. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling OBJ (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.