Does Open Text Corporation’s (NASDAQ:OTEX) CEO Salary Reflect Performance?
Mark Barrenechea became the CEO of Open Text Corporation (NASDAQ:OTEX) in 2012. First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
View our latest analysis for Open Text
How Does Mark Barrenechea’s Compensation Compare With Similar Sized Companies?
According to our data, Open Text Corporation has a market capitalization of US$8.7b, and pays its CEO total annual compensation worth US$7.1m. That’s below the compensation, last year. We examined companies with market caps from US$4.0b to US$12b, and discovered that the median CEO compensation of that group was US$7.0m.
So Mark Barrenechea 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.
You can see a visual representation of the CEO compensation at Open Text, below.
Is Open Text Corporation Growing?
Over the last three years Open Text Corporation has shrunk its earnings per share by an average of 12% per year. Its revenue is up 16% over last year.
Sadly for shareholders, earnings per share are actually down, over three years. There’s no doubt that the silver lining is that revenue is up. But it isn’t sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.
It could be important to check this free visual depiction of what analysts expect for the future.
Has Open Text Corporation Been A Good Investment?
I think that the total shareholder return of 51%, over three years, would leave most Open Text Corporation shareholders smiling. So they may not be at all concerned if the CEO is paid more than is normal for companies around the same size.
In Summary…
Remuneration for Mark Barrenechea is close enough to the median pay for a CEO of a similar sized company .
We feel that earnings per share have been a bit disappointing, but it’s nice to see positive shareholder returns over the last three years. So we doubt many are complaining about the fairly normal CEO pay. Whatever your view on compensation, you might want to check if insiders are buying or selling Open Text Corporation shares (free trial).
Of course, the past can be informative so you might be interested in considering this analytical visualization showing the company history of earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
