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Is Oppenheimer Holdings Inc. (NYSE:OPY) Overpaying Its CEO?

Simply Wall St

In 1985 Bud Lowenthal was appointed CEO of Oppenheimer Holdings Inc. (NYSE:OPY). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. 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.

See our latest analysis for Oppenheimer Holdings

How Does Bud Lowenthal's Compensation Compare With Similar Sized Companies?

Our data indicates that Oppenheimer Holdings Inc. is worth US$358m, and total annual CEO compensation was reported as US$5.0m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$500k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. When we examined a selection of companies with market caps ranging from US$200m to US$800m, we found the median CEO total compensation was US$1.7m.

It would therefore appear that Oppenheimer Holdings Inc. pays Bud Lowenthal more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

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

NYSE:OPY CEO Compensation, December 10th 2019

Is Oppenheimer Holdings Inc. Growing?

On average over the last three years, Oppenheimer Holdings Inc. has grown earnings per share (EPS) by 83% each year (using a line of best fit). Revenue was pretty flat on last year.

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 Oppenheimer Holdings Inc. Been A Good Investment?

I think that the total shareholder return of 58%, over three years, would leave most Oppenheimer Holdings Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

We compared total CEO remuneration at Oppenheimer Holdings Inc. with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.

However we must not forget that the EPS growth has been very strong over three years. Even better, returns to shareholders have been plentiful, over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Oppenheimer Holdings (free visualization of insider trades).

If you want to buy a stock that is better than Oppenheimer Holdings, this free list of high return, low debt companies is a great place to look.

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.