Tom Patrick O’Leary has been the CEO of Iluka Resources Limited (ASX:ILU) since 2016. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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 method should give us information to assess how appropriately the company pays the CEO.
How Does Tom Patrick O’Leary's Compensation Compare With Similar Sized Companies?
Our data indicates that Iluka Resources Limited is worth AU$3.1b, and total annual CEO compensation is AU$2.8m. (This is based on the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at AU$1.4m. We looked at a group of companies with market capitalizations from AU$1.5b to AU$4.7b, and the median CEO total compensation was AU$2.5m.
So Tom Patrick O’Leary receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
You can see, below, how CEO compensation at Iluka Resources has changed over time.
Is Iluka Resources Limited Growing?
Iluka Resources Limited has increased its earnings per share (EPS) by an average of 93% a year, over the last three years (using a line of best fit). Its revenue is up 7.6% over 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 modest revenue growth, suggesting the underlying business is healthy. Shareholders might be interested in this free visualization of analyst forecasts.
Has Iluka Resources Limited Been A Good Investment?
Boasting a total shareholder return of 34% over three years, Iluka Resources Limited has done well by shareholders. 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.
Tom Patrick O’Leary is paid around what is normal the leaders of comparable size companies.
Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. Indeed, many might consider the pay rather modest, given the solid company performance! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Iluka Resources.
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 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. Thank you for reading.