In This Article:
Megan Baldwin became the CEO of Opthea Limited (ASX:OPT) in 2014. 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. 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.
View our latest analysis for Opthea
How Does Megan Baldwin's Compensation Compare With Similar Sized Companies?
According to our data, Opthea Limited has a market capitalization of AU$894m, and pays its CEO total annual compensation worth AU$943k. (This figure is for the year to June 2019). Notably, that's an increase of 39% over the year before. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$414k. We examined companies with market caps from AU$583m to AU$2.3b, and discovered that the median CEO total compensation of that group was AU$1.4m.
Most shareholders would consider it a positive that Megan Baldwin takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it's important we delve into the performance of the actual business.
You can see, below, how CEO compensation at Opthea has changed over time.
Is Opthea Limited Growing?
Over the last three years Opthea Limited has shrunk its earnings per share by an average of 28% per year (measured with a line of best fit). In the last year, its revenue is up 66%.
As investors, we are a bit wary of companies that have lower earnings per share, over three years. On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. It could be important to check this free visual depiction of what analysts expect for the future.
Has Opthea Limited Been A Good Investment?
Most shareholders would probably be pleased with Opthea Limited for providing a total return of 314% 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...
Opthea Limited is currently paying its CEO below what is normal for companies of its size.
It's well worth noting that while Megan Baldwin is paid below what is normal at companies of similar size, the returns have been very pleasing, over the last three years. We would like to see EPS growth, but in our view it seems the CEO is modestly remunerated. So you may want to check if insiders are buying Opthea shares with their own money (free access).