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Should You Worry About Orthocell Limited's (ASX:OCC) CEO Pay Cheque?

Simply Wall St

Paul Anderson is the CEO of Orthocell Limited (ASX:OCC). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Orthocell

How Does Paul Anderson's Compensation Compare With Similar Sized Companies?

According to our data, Orthocell Limited has a market capitalization of AU$62m, and paid its CEO total annual compensation worth AU$582k over the year to June 2019. That's actually a decrease on the year before. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$365k. We examined a group of similar sized companies, with market capitalizations of below AU$298m. The median CEO total compensation in that group is AU$375k.

Thus we can conclude that Paul Anderson receives more in total compensation than the median of a group of companies in the same market, and of similar size to Orthocell Limited. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

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

ASX:OCC CEO Compensation, October 4th 2019

Is Orthocell Limited Growing?

On average over the last three years, Orthocell Limited has shrunk earnings per share by 9.3% each year (measured with a line of best fit). Its revenue is up 53% over last year.

Investors should note that, over three years, earnings per share are down. But on the other hand, revenue growth is strong, suggesting a brighter future. These two metric are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Although we don't have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Orthocell Limited Been A Good Investment?

Given the total loss of 7.1% over three years, many shareholders in Orthocell Limited are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We compared the total CEO remuneration paid by Orthocell Limited, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

While we have not been overly impressed by the business performance, the shareholder returns, over three years, have been disappointing. Shareholders may wish to consider further research. Although we don't think the CEO pay is too high, it is probably more on the generous side of things. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Orthocell (free visualization of insider trades).

Important note: Orthocell may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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.

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. Thank you for reading.