- Oops!Something went wrong.Please try again later.
This article will reflect on the compensation paid to Earl Gasparich who has served as CEO of Oceania Healthcare Limited (NZSE:OCA) since 2014. This analysis will also assess whether Oceania Healthcare pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing Oceania Healthcare Limited's CEO Compensation With the industry
According to our data, Oceania Healthcare Limited has a market capitalization of NZ$929m, and paid its CEO total annual compensation worth NZ$637k over the year to May 2020. Notably, that's a decrease of 18% over the year before. Notably, the salary which is NZ$517.9k, represents most of the total compensation being paid.
On examining similar-sized companies in the industry with market capitalizations between NZ$552m and NZ$2.2b, we discovered that the median CEO total compensation of that group was NZ$1.3m. This suggests that Earl Gasparich is paid below the industry median. Moreover, Earl Gasparich also holds NZ$3.1m worth of Oceania Healthcare stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, roughly 81% of total compensation represents salary and 19% is other remuneration. There isn't a significant difference between Oceania Healthcare and the broader market, in terms of salary allocation in the overall compensation package. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Oceania Healthcare Limited's Growth
Over the last three years, Oceania Healthcare Limited has shrunk its earnings per share by 42% per year. Its revenue is up 3.7% over the last year.
Few shareholders would be pleased to read that EPS have declined. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Oceania Healthcare Limited Been A Good Investment?
We think that the total shareholder return of 57%, over three years, would leave most Oceania Healthcare Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
As we touched on above, Oceania Healthcare Limited is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. And while EPS growth is in the red, shareholder returns have been great over the last three years, so that's certainly a bright spot! We would like to see EPS growth, but in our view CEO compensation is modest.
CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 3 warning signs for Oceania Healthcare that investors should look into moving forward.
Important note: Oceania Healthcare is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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.