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How Does Omni Bridgeway's (ASX:OBL) CEO Pay Compare With Company Performance?

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Andrew Saker became the CEO of Omni Bridgeway Limited (ASX:OBL) in 2015, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Omni Bridgeway.

See our latest analysis for Omni Bridgeway

How Does Total Compensation For Andrew Saker Compare With Other Companies In The Industry?

At the time of writing, our data shows that Omni Bridgeway Limited has a market capitalization of AU$1.2b, and reported total annual CEO compensation of AU$2.3m for the year to June 2020. Notably, that's an increase of 20% over the year before. We note that the salary portion, which stands at AU$1.23m constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between AU$517m and AU$2.1b had a median total CEO compensation of AU$1.9m. So it looks like Omni Bridgeway compensates Andrew Saker in line with the median for the industry. What's more, Andrew Saker holds AU$810k worth of shares in the company in their own name.

Component

2020

2019

Proportion (2020)

Salary

AU$1.2m

AU$1.2m

52%

Other

AU$1.1m

AU$750k

48%

Total Compensation

AU$2.3m

AU$1.9m

100%

Speaking on an industry level, nearly 61% of total compensation represents salary, while the remainder of 39% is other remuneration. In Omni Bridgeway's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

ceo-compensation
ceo-compensation

Omni Bridgeway Limited's Growth

Over the last three years, Omni Bridgeway Limited has shrunk its earnings per share by 68% per year. Its revenue is up 515% over the last year.

The decrease in EPS could be a concern for some investors. But on the other hand, revenue growth is strong, suggesting a brighter future. 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 Omni Bridgeway Limited Been A Good Investment?

Most shareholders would probably be pleased with Omni Bridgeway Limited for providing a total return of 53% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

As we touched on above, Omni Bridgeway Limited is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Investors will be happy that Omni Bridgeway has produced strong shareholder returns for the past three years. Meanwhile, revenues have been increasing recently However, on a concerning note, EPS is not growing. Overall, the company's performance hasn't been that disappointing for us to object the CEO compensation.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for Omni Bridgeway that investors should be aware of in a dynamic business environment.

Switching gears from Omni Bridgeway, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.