Does EQT Holdings' (ASX:EQT) CEO Salary Compare Well With Industry Peers?

This article will reflect on the compensation paid to Mick O’Brien who has served as CEO of EQT Holdings Limited (ASX:EQT) since 2016. This analysis will also assess whether EQT Holdings pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for EQT Holdings

How Does Total Compensation For Mick O’Brien Compare With Other Companies In The Industry?

According to our data, EQT Holdings Limited has a market capitalization of AU$557m, and paid its CEO total annual compensation worth AU$957k over the year to June 2020. That's a notable decrease of 35% on last year. Notably, the salary which is AU$713.4k, represents most of the total compensation being paid.

On comparing similar companies from the same industry with market caps ranging from AU$259m to AU$1.0b, we found that the median CEO total compensation was AU$893k. From this we gather that Mick O’Brien is paid around the median for CEOs in the industry. Moreover, Mick O’Brien also holds AU$1.9m worth of EQT Holdings stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, roughly 70% of total compensation represents salary and 30% is other remuneration. There isn't a significant difference between EQT Holdings and the broader market, in terms of salary allocation in the overall compensation package. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

EQT Holdings Limited's Growth

Over the past three years, EQT Holdings Limited has seen its earnings per share (EPS) grow by 6.5% per year. Its revenue is up 3.2% over the last year.

We're not particularly impressed by the revenue growth, but we're happy with the modest EPS growth. So there are some positives here, but not enough to earn high praise. 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 EQT Holdings Limited Been A Good Investment?

Most shareholders would probably be pleased with EQT Holdings Limited for providing a total return of 50% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

As we touched on above, EQT Holdings 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. However, the company's EPS growth numbers over the last three years is not that impressive. On the other hand, shareholder returns over the same period have been very healthy. So while shareholders shouldn't be overly concerned about CEO compensation, we suspect most would prefer to see improved performance, before a bump in pay.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 1 warning sign for EQT Holdings that investors should look into moving forward.

Switching gears from EQT Holdings, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.
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