Andrew Cole has been the CEO of OZ Minerals Limited (ASX:OZL) since 2014. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Andrew Cole's Compensation Compare With Similar Sized Companies?
According to our data, OZ Minerals Limited has a market capitalization of AU$3.0b, and pays its CEO total annual compensation worth AU$2.4m. (This figure is for the year to December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$780k. When we examined a selection of companies with market caps ranging from AU$1.5b to AU$4.7b, we found the median CEO total compensation was AU$2.4m.
So Andrew Cole is paid around the average of the companies we looked at. 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 OZ Minerals has changed from year to year.
Is OZ Minerals Limited Growing?
On average over the last three years, OZ Minerals Limited has grown earnings per share (EPS) by 33% each year (using a line of best fit). It achieved revenue growth of 9.2% 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. You might want to check this free visual report on analyst forecasts for future earnings.
Has OZ Minerals Limited Been A Good Investment?
I think that the total shareholder return of 42%, over three years, would leave most OZ Minerals Limited shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
Remuneration for Andrew Cole is close enough to the median pay for a CEO of a similar sized company .
Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. Indeed, many might consider the pay rather modest, given the solid company performance! Whatever your view on compensation, you might want to check if insiders are buying or selling OZ Minerals shares (free trial).
If you want to buy a stock that is better than OZ Minerals, this free list of high return, low debt companies is a great place to look.
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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.