Oscar González Rocha has been the CEO of Southern Copper Corporation (NYSE:SCCO) since 2004. First, this article will compare CEO compensation with compensation at other large companies. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Oscar González Rocha’s Compensation Compare With Similar Sized Companies?
According to our data, Southern Copper Corporation has a market capitalization of US$28b, and paid its CEO total annual compensation worth US$1.6m over the year to December 2019. That’s a notable increase of 9.0% on last year. We think total compensation is more important but we note that the CEO salary is lower, at US$490k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be US$12m. There aren’t very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
Now let’s take a look at the pay mix on an industry and company level to gain a better understanding of where Southern Copper stands. Speaking on an industry level, we can see that nearly 38% of total compensation represents salary, while the remainder of 62% is other remuneration. So it seems like there isn’t a significant difference between Southern Copper and the broader market, in terms of salary allocation in the overall compensation package.
This would give shareholders a good impression of the company, since most large companies pay more, leaving less for shareholders. Though positive, it’s important we delve into the performance of the actual business. You can see, below, how CEO compensation at Southern Copper has changed over time.
Is Southern Copper Corporation Growing?
Over the last three years Southern Copper Corporation has seen earnings per share (EPS) move in a positive direction by an average of 19% per year (using a line of best fit). It achieved revenue growth of 3.5% over the last year.
This demonstrates that the company has been improving recently. A good result. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions. You might want to check this free visual report on analyst forecasts for future earnings.
Has Southern Copper Corporation Been A Good Investment?
Southern Copper Corporation has served shareholders reasonably well, with a total return of 16% over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
It appears that Southern Copper Corporation remunerates its CEO below most large companies.
Since the business is growing, many would argue this suggests the pay is modest. While returns over the last few years haven’t been top notch, there is nothing to suggest to us that Oscar González Rocha is overcompensated. Few would complain about reasonable CEO remuneration when the business is growing earnings per share. But it would be nice if insiders were also buying shares. On another note, we’ve spotted 3 warning signs for Southern Copper that investors should look into moving forward.
Important note: Southern Copper may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Thank you for reading.