In 2015 Ron Delia was appointed CEO of Amcor plc (ASX:AMC). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Ron Delia's Compensation Compare With Similar Sized Companies?
According to our data, Amcor plc has a market capitalization of AU$25b, and paid its CEO total annual compensation worth US$5.2m over the year to June 2019. That's below the compensation, last year. While we always look at total compensation first, we note that the salary component is less, at US$1.6m. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO total compensation was US$3.9m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts - even though some are quite a bit bigger than others).
As you can see, Ron Delia is paid more than the median CEO pay at large companies, in the same market. However, this does not necessarily mean Amcor plc is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Amcor has changed over time.
Is Amcor plc Growing?
Amcor plc has increased its earnings per share (EPS) by an average of 11% a year, over the last three years (using a line of best fit). It achieved revenue growth of 11% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. You might want to check this free visual report on analyst forecasts for future earnings.
Has Amcor plc Been A Good Investment?
Amcor plc has served shareholders reasonably well, with a total return of 19% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
We compared total CEO remuneration at Amcor plc with the amount paid at other large companies. As discussed above, we discovered that the company pays more than the median of that group.
However, the earnings per share growth over three years is certainly impressive. We also think investors are doing ok, over the same time period. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn't call the CEO pay problematic. Whatever your view on compensation, you might want to check if insiders are buying or selling Amcor shares (free trial).
If you want to buy a stock that is better than Amcor, this free list of high return, low debt companies is a great place to look.
If you spot an error that warrants correction, please contact the editor at email@example.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.
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