Alberto Zuleta has been the CEO of Orica Limited (ASX:ORI) since 2015. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. 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.
How Does Alberto Zuleta's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Orica Limited has a market cap of AU$8.7b, and reported total annual CEO compensation of AU$4.1m for the year to September 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$1.8m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of AU$5.9b to AU$18b. The median total CEO compensation was AU$4.1m.
That means Alberto Zuleta receives fairly typical remuneration for the CEO of a company that size. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
The graphic below shows how CEO compensation at Orica has changed from year to year.
Is Orica Limited Growing?
On average over the last three years, Orica Limited has grown earnings per share (EPS) by 45% each year (using a line of best fit). It achieved revenue growth of 10% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. You might want to check this free visual report on analyst forecasts for future earnings.
Has Orica Limited Been A Good Investment?
Boasting a total shareholder return of 54% over three years, Orica Limited 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.
Alberto Zuleta is paid around what is normal the leaders of comparable size companies.
The company is growing earnings per share and total shareholder returns have been pleasing. So one could argue the CEO compensation is quite modest, if you consider company performance! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Orica.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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