In This Article:
This article will reflect on the compensation paid to Tom Patrick O’Leary who has served as CEO of Iluka Resources Limited (ASX:ILU) since 2016. This analysis will also assess whether Iluka Resources pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
See our latest analysis for Iluka Resources
How Does Total Compensation For Tom Patrick O’Leary Compare With Other Companies In The Industry?
At the time of writing, our data shows that Iluka Resources Limited has a market capitalization of AU$4.1b, and reported total annual CEO compensation of AU$3.2m for the year to December 2019. Notably, that's an increase of 14% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at AU$1.4m.
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$2.7m. This suggests that Iluka Resources remunerates its CEO largely in line with the industry average. Moreover, Tom Patrick O’Leary also holds AU$3.3m worth of Iluka Resources stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | AU$1.4m | AU$1.4m | 44% |
| Other | AU$1.8m | AU$1.4m | 56% |
| Total Compensation | AU$3.2m | AU$2.8m | 100% |
Speaking on an industry level, nearly 70% of total compensation represents salary, while the remainder of 30% is other remuneration. In Iluka Resources' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Iluka Resources Limited's Growth
Iluka Resources Limited saw earnings per share stay pretty flat over the last three years. In the last year, its revenue is down 4.6%.
We would argue that the lack of revenue growth in the last year is less than ideal, but the modest improvement in EPS is good. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Iluka Resources Limited Been A Good Investment?
Iluka Resources Limited has served shareholders reasonably well, with a total return of 12% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.