Should You Worry About Southern Copper Corporation's (NYSE:SCCO) CEO Pay?
In 2004 Oscar González Rocha was appointed CEO of Southern Copper Corporation (NYSE:SCCO). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
See our latest analysis for Southern Copper
How Does Oscar González Rocha's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Southern Copper Corporation has a market cap of US$33b, and reported total annual CEO compensation of US$1.5m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$490k. 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 over US$8.0b and the median CEO total compensation was US$11m. (We took a wide range because the CEOs of massive companies tend to be paid similar amounts - even though some are quite a bit bigger than others).
This would give shareholders a good impression of the company, since most large companies pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see, below, how CEO compensation at Southern Copper has changed over time.
Is Southern Copper Corporation Growing?
Over the last three years Southern Copper Corporation has grown its earnings per share (EPS) by an average of 24% per year (using a line of best fit). In the last year, its revenue is down 1.9%.
This demonstrates that the company has been improving recently. A good result. Revenue growth is a real positive for growth, but ultimately profits are more important. It could be important to check this free visual depiction of what analysts expect for the future.
Has Southern Copper Corporation Been A Good Investment?
Most shareholders would probably be pleased with Southern Copper Corporation for providing a total return of 49% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
Southern Copper Corporation is currently paying its CEO below what is normal for large companies.
Considering the underlying business is growing earnings, this would suggest the pay is modest. The strong history of shareholder returns might even have some thinking that Oscar González Rocha deserves a raise! It is relatively rare to see a modestly paid CEO when performance is so impressive. It would be even more positive if company insiders are buying shares. So you may want to check if insiders are buying Southern Copper shares with their own money (free access).
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.
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.
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. Thank you for reading.
