Andrew Cole became the CEO of OZ Minerals Limited (ASX:OZL) in 2014, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether OZ Minerals pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
View our latest analysis for OZ Minerals
How Does Total Compensation For Andrew Cole Compare With Other Companies In The Industry?
According to our data, OZ Minerals Limited has a market capitalization of AU$4.5b, and paid its CEO total annual compensation worth AU$2.4m over the year to December 2019. That's mostly flat as compared to the prior year's compensation. We think total compensation is more important but our data shows that the CEO salary is lower, at AU$829k.
On comparing similar companies from the same industry with market caps ranging from AU$2.8b to AU$8.9b, we found that the median CEO total compensation was AU$2.4m. So it looks like OZ Minerals compensates Andrew Cole in line with the median for the industry. What's more, Andrew Cole holds AU$6.7m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | AU$829k | AU$780k | 34% |
| Other | AU$1.6m | AU$1.7m | 66% |
| Total Compensation | AU$2.4m | AU$2.4m | 100% |
On an industry level, around 70% of total compensation represents salary and 30% is other remuneration. OZ Minerals pays a modest slice of remuneration through salary, as compared 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.
OZ Minerals Limited's Growth
Over the past three years, OZ Minerals Limited has seen its earnings per share (EPS) grow by 12% per year. Revenue was pretty flat on last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has OZ Minerals Limited Been A Good Investment?
Boasting a total shareholder return of 72% over three years, OZ Minerals 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...
As we touched on above, OZ Minerals Limited is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. The company is growing earnings per share and total shareholder returns have been pleasing. So one could argue that CEO compensation is quite modest, if you consider company performance! Stockholders might even be okay with a bump in pay, seeing as how investor returns have been so strong.