This article will reflect on the compensation paid to Jeff Olsen who has served as CEO of Boart Longyear Limited (ASX:BLY) since 2016. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
View our latest analysis for Boart Longyear
Comparing Boart Longyear Limited's CEO Compensation With the industry
According to our data, Boart Longyear Limited has a market capitalization of AU$32m, and paid its CEO total annual compensation worth US$1.8m over the year to December 2019. We note that's an increase of 23% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$675k.
In comparison with other companies in the industry with market capitalizations under AU$279m, the reported median total CEO compensation was US$216k. This suggests that Jeff Olsen is paid more than the median for the industry. Moreover, Jeff Olsen also holds AU$99k worth of Boart Longyear stock directly under their own name.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | US$675k | US$626k | 38% |
| Other | US$1.1m | US$805k | 62% |
| Total Compensation | US$1.8m | US$1.4m | 100% |
Speaking on an industry level, nearly 70% of total compensation represents salary, while the remainder of 30% is other remuneration. In Boart Longyear's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Boart Longyear Limited's Growth
Boart Longyear Limited has seen its earnings per share (EPS) increase by 131% a year over the past three years. Its revenue is down 3.3% over the previous year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Boart Longyear Limited Been A Good Investment?
With a three year total loss of 98% for the shareholders, Boart Longyear Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.
In Summary...
As we touched on above, Boart Longyear Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But the company has impressed with its EPS growth, but shareholder returns — over the same period — have been disappointing. Considering overall performance, we can't say Jeff is underpaid, in fact compensation is definitely on the higher side.