In This Article:
Tony Walls is the CEO of Objective Corporation Limited (ASX:OCL). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for Objective
How Does Tony Walls's Compensation Compare With Similar Sized Companies?
Our data indicates that Objective Corporation Limited is worth AU$542m, and total annual CEO compensation was reported as AU$301k for the year to June 2019. We think total compensation is more important but we note that the CEO salary is lower, at AU$280k. We examined companies with market caps from AU$315m to AU$1.3b, and discovered that the median CEO total compensation of that group was AU$1.2m.
Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Objective. Speaking on an industry level, we can see that nearly 67% of total compensation represents salary, while the remainder of 33% is other remuneration. Objective is paying a higher share of its remuneration through a salary in comparison to the overall industry.
At first glance this seems like a real positive for shareholders, since Tony Walls is paid less than the average total compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance. The graphic below shows how CEO compensation at Objective has changed from year to year.
Is Objective Corporation Limited Growing?
Over the last three years Objective Corporation Limited has seen earnings per share (EPS) move in a positive direction by an average of 4.3% per year (using a line of best fit). In the last year, its revenue is up 12%.
I think the revenue growth is good. And the improvement in earnings per share is modest but respectable. So while performance isn't amazing, we think it really does seem quite respectable. You might want to check this free visual report on analyst forecasts for future earnings.
Has Objective Corporation Limited Been A Good Investment?
Boasting a total shareholder return of 187% over three years, Objective Corporation Limited has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary...
Objective Corporation Limited is currently paying its CEO below what is normal for companies of its size.