Ayman Asfari became the CEO of Petrofac Limited (LON:PFC) in 2002. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Ayman Asfari's Compensation Compare With Similar Sized Companies?
According to our data, Petrofac Limited has a market capitalization of UK£1.2b, and paid its CEO total annual compensation worth US$2.3m over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$898k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO total compensation was US$1.8m.
That means Ayman Asfari 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 Petrofac has changed from year to year.
Is Petrofac Limited Growing?
On average over the last three years, Petrofac Limited has grown earnings per share (EPS) by 85% each year (using a line of best fit). It saw its revenue drop 3.1% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. While it would be good to see revenue growth, profits matter more in the end. Shareholders might be interested in this free visualization of analyst forecasts.
Has Petrofac Limited Been A Good Investment?
With a three year total loss of 52%, Petrofac Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
Remuneration for Ayman Asfari is close enough to the median pay for a CEO of a similar sized company .
We think that the EPS growth is very pleasing, but we find the returns over the last three years to be lacking. Considering the the positives we don't think the CEO pays is too high, but it's certainly hard to argue it is too low. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Petrofac.
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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