Mark Cutifani became the CEO of Anglo American plc (LON:AAL) in 2013. First, this article will compare CEO compensation with compensation at other large companies. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Mark Cutifani's Compensation Compare With Similar Sized Companies?
According to our data, Anglo American plc has a market capitalization of UK£26b, and paid its CEO total annual compensation worth US$15m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$1.3m. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a group of companies with market caps over UK£6.5b, we found that their median CEO total compensation was UK£3.8m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.
It would therefore appear that Anglo American plc pays Mark Cutifani more than the median CEO remuneration at large companies, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at Anglo American has changed from year to year.
Is Anglo American plc Growing?
Anglo American plc has increased its earnings per share (EPS) by an average of 55% a year, over the last three years (using a line of best fit). It achieved revenue growth of 3.1% over the last year.
This demonstrates that the company has been improving recently. A good result. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Shareholders might be interested in this free visualization of analyst forecasts.
Has Anglo American plc Been A Good Investment?
Boasting a total shareholder return of 120% over three years, Anglo American plc has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We examined the amount Anglo American plc pays its CEO, and compared it to the amount paid by other large companies. Our data suggests that it pays above the median CEO pay within that group.
However we must not forget that the EPS growth has been very strong over three years. On top of that, in the same period, returns to shareholders have been great. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. Shareholders may want to check for free if Anglo American insiders are buying or selling shares.
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.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.