Iván Arriagada Herrera became the CEO of Antofagasta plc (LON:ANTO) in 2016. This analysis aims first to contrast CEO compensation with other large companies. After that, we will consider the growth in the business. 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 Iván Arriagada Herrera's Compensation Compare With Similar Sized Companies?
According to our data, Antofagasta plc has a market capitalization of UK£9.3b, and paid its CEO total annual compensation worth US$2.2m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$668k. Importantly, there may be performance hurdles relating to the non-salary component 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$4.5m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.
This would give shareholders a good impression of the company, since most large companies pay more, leaving less for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.
The graphic below shows how CEO compensation at Antofagasta has changed from year to year.
Is Antofagasta plc Growing?
On average over the last three years, Antofagasta plc has grown earnings per share (EPS) by 49% each year (using a line of best fit). It achieved revenue growth of 6.5% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. 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 Antofagasta plc Been A Good Investment?
Most shareholders would probably be pleased with Antofagasta plc for providing a total return of 44% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Antofagasta plc is currently paying its CEO below what is normal for large companies.
Many would consider this to indicate that the pay is modest since the business is growing. The strong history of shareholder returns might even have some thinking that Iván Arriagada Herrera deserves a raise! Most shareholders like to see a modestly paid CEO combined with strong performance by the company. The cherry on top would be if company insiders are buying shares with their own money. Whatever your view on compensation, you might want to check if insiders are buying or selling Antofagasta shares (free trial).
If you want to buy a stock that is better than Antofagasta, 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 firstname.lastname@example.org. 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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