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Is EQT Holdings Limited (ASX:EQT) Excessively Paying Its CEO?

Simply Wall St

Mick O’Brien became the CEO of EQT Holdings Limited (ASX:EQT) in 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for EQT Holdings

How Does Mick O’Brien's Compensation Compare With Similar Sized Companies?

Our data indicates that EQT Holdings Limited is worth AU$650m, and total annual CEO compensation was reported as AU$1.5m for the year to June 2019. That's a notable increase of 8.9% on last year. While we always look at total compensation first, we note that the salary component is less, at AU$714k. When we examined a selection of companies with market caps ranging from AU$291m to AU$1.2b, we found the median CEO total compensation was AU$1.1m.

Thus we can conclude that Mick O’Brien receives more in total compensation than the median of a group of companies in the same market, and of similar size to EQT Holdings Limited. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see a visual representation of the CEO compensation at EQT Holdings, below.

ASX:EQT CEO Compensation, October 23rd 2019

Is EQT Holdings Limited Growing?

Over the last three years EQT Holdings Limited has grown its earnings per share (EPS) by an average of 18% per year (using a line of best fit). It achieved revenue growth of 4.6% over the last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. It could be important to check this free visual depiction of what analysts expect for the future.

Has EQT Holdings Limited Been A Good Investment?

Boasting a total shareholder return of 88% over three years, EQT Holdings 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.

In Summary...

We examined the amount EQT Holdings Limited pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. Even better, returns to shareholders have been plentiful, over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. Shareholders may want to check for free if EQT Holdings insiders are buying or selling shares.

Important note: EQT Holdings may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE 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 editorial-team@simplywallst.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. Thank you for reading.