In 2016 Joe Salomon was appointed CEO of Oilex Ltd (ASX:OEX). 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.
How Does Joe Salomon's Compensation Compare With Similar Sized Companies?
Our data indicates that Oilex Ltd is worth AU$12m, and total annual CEO compensation was reported as AU$274k for the year to June 2018. We think total compensation is more important but we note that the CEO salary is lower, at AU$223k. We looked at a group of companies with market capitalizations under AU$298m, and the median CEO total compensation was AU$375k.
So Joe Salomon is paid around the average of the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
You can see a visual representation of the CEO compensation at Oilex, below.
Is Oilex Ltd Growing?
Over the last three years Oilex Ltd has grown its earnings per share (EPS) by an average of 99% per year (using a line of best fit). Its revenue is up 15% over last year.
This demonstrates that the company has been improving recently. A good result. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Although we don't have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Oilex Ltd Been A Good Investment?
Since shareholders would have lost about 50% over three years, some Oilex Ltd shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
Remuneration for Joe Salomon is close enough to the median pay for a CEO of a similar sized company .
We'd say the company can boast of its EPS growth, but we cannot say the same about the lacklustre shareholder returns (over the last three years). We'd be surprised if shareholders want to see a pay rise for the CEO, but we'd stop short of calling their pay too generous. So you may want to check if insiders are buying Oilex shares with their own money (free access).
If you want to buy a stock that is better than Oilex, 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 email@example.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. Thank you for reading.