In This Article:
Andrew Mackenzie became the CEO of BHP Billiton Limited (ASX:BHP) in 2013. First, this article will compare CEO compensation with compensation at other large companies. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
See our latest analysis for BHP Billiton
How Does Andrew Mackenzie’s Compensation Compare With Similar Sized Companies?
Our data indicates that BHP Billiton Limited is worth AU$166.1b, and total annual CEO compensation is US$8m. Notably, that’s an increase of 14% over the year before. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO compensation was US$5m.
Thus we can conclude that Andrew Mackenzie receives more in total compensation than the median of a group of large companies in the same market as BHP Billiton Limited. However, this doesn’t necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at BHP Billiton has changed from year to year.
Is BHP Billiton Limited Growing?
BHP Billiton Limited has increased its earnings per share (EPS) by an average of 79% a year, over the last three years In the last year, its revenue is up 20%.
This demonstrates that the company has been improving recently. A good result. IThis sort of respectable year-on-year revenue growth is often seen at a healthy, growing business.
It could be important to check this free visual depiction of what analysts expect for the future.
Has BHP Billiton Limited Been A Good Investment?
Most shareholders would probably be pleased with BHP Billiton Limited for providing a total return of 44% 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…
We compared the total CEO remuneration paid by BHP Billiton Limited, and compared it to remuneration at a group of other large companies. We found that it pays well over the median amount paid in the benchmark group.
However we must not forget that the EPS growth has been very strong over three years. In addition, shareholders have done well over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. Whatever your view on compensation, you might want to check if insiders are buying or selling BHP Billiton Limited shares (free trial).