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This article will reflect on the compensation paid to Richard Abela who has served as CEO of Oldfields Holdings Limited (ASX:OLH) since 2016. This analysis will also assess whether Oldfields Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing Oldfields Holdings Limited's CEO Compensation With the industry
Our data indicates that Oldfields Holdings Limited has a market capitalization of AU$13m, and total annual CEO compensation was reported as AU$273k for the year to June 2020. That's a fairly small increase of 5.7% over the previous year. Notably, the salary which is AU$247.8k, represents most of the total compensation being paid.
In comparison with other companies in the industry with market capitalizations under AU$275m, the reported median total CEO compensation was AU$368k. This suggests that Oldfields Holdings remunerates its CEO largely in line with the industry average.
On an industry level, roughly 80% of total compensation represents salary and 20% is other remuneration. It's interesting to note that Oldfields Holdings pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Oldfields Holdings Limited's Growth
Over the last three years, Oldfields Holdings Limited has shrunk its earnings per share by 96% per year. Revenue was pretty flat on last year.
The decline in EPS is a bit concerning. And the flat revenue hardly impresses. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Oldfields Holdings Limited Been A Good Investment?
Since shareholders would have lost about 11% over three years, some Oldfields Holdings Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
As previously discussed, Richard is compensated close to the median for companies of its size, and which belong to the same industry. Meanwhile, EPS growth and shareholder returns have been in the red for the last three years. We'd stop short of saying compensation is inappropriate, but we would understand if shareholders had questions regarding a future raise.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Oldfields Holdings that you should be aware of before investing.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.
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