How Should Investors Feel About Oldfields Holdings Limited's (ASX:OLH) CEO Pay?
In 2016 Richard Abela was appointed CEO of Oldfields Holdings Limited (ASX:OLH). 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. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
Check out our latest analysis for Oldfields Holdings
How Does Richard Abela's Compensation Compare With Similar Sized Companies?
According to our data, Oldfields Holdings Limited has a market capitalization of AU$7.0m, and paid its CEO total annual compensation worth AU$259k over the year to June 2019. We think total compensation is more important but we note that the CEO salary is lower, at AU$240k. We examined a group of similar sized companies, with market capitalizations of below AU$293m. The median CEO total compensation in that group is AU$382k.
Most shareholders would consider it a positive that Richard Abela takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
The graphic below shows how CEO compensation at Oldfields Holdings has changed from year to year.
Is Oldfields Holdings Limited Growing?
Over the last three years Oldfields Holdings Limited has grown its earnings per share (EPS) by an average of 41% per year (using a line of best fit). In the last year, its revenue is down 4.4%.
This demonstrates that the company has been improving recently. A good result. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Oldfields Holdings Limited Been A Good Investment?
Boasting a total shareholder return of 183% over three years, Oldfields Holdings Limited has done well by shareholders. 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...
It looks like Oldfields Holdings Limited pays its CEO less than similar sized companies.
Since the business is growing, many would argue this suggests the pay is modest. And given most shareholders are probably very happy with recent returns, you might even think that Richard Abela deserves a raise! It's not often we see shareholders do so well, and yet the CEO is paid modestly. But it is even better if company insiders are also buying shares with their own money. Whatever your view on compensation, you might want to check if insiders are buying or selling Oldfields Holdings shares (free trial).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
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. Thank you for reading.
