How Is OFX Group's (ASX:OFX) CEO Paid Relative To Peers?

Skander Malcolm became the CEO of OFX Group Limited (ASX:OFX) in 2017, 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 look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for OFX Group.

View our latest analysis for OFX Group

Comparing OFX Group Limited's CEO Compensation With the industry

According to our data, OFX Group Limited has a market capitalization of AU$304m, and paid its CEO total annual compensation worth AU$1.1m over the year to March 2020. We note that's an increase of 44% above last year. Notably, the salary which is AU$657.4k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations ranging from AU$132m to AU$526m, the reported median CEO total compensation was AU$821k. Accordingly, our analysis reveals that OFX Group Limited pays Skander Malcolm north of the industry median. What's more, Skander Malcolm holds AU$3.9m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 61% of total compensation represents salary and 39% is other remuneration. Our data reveals that OFX Group allocates salary more or less in line with the wider market. 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.

A Look at OFX Group Limited's Growth Numbers

OFX Group Limited has reduced its earnings per share by 6.9% a year over the last three years. In the last year, its revenue is up 2.9%.

Few shareholders would be pleased to read that EPS have declined. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 OFX Group Limited Been A Good Investment?

With a three year total loss of 3.7% for the shareholders, OFX Group Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As we noted earlier, OFX Group pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Disappointingly, share price gains over the last three years have failed to materialize. What's equally worrying is that the company isn't growing by our analysis. Considering such poor performance, we think shareholders might be concerned if the CEO's compensation were to grow.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 1 warning sign for OFX Group that investors should look into moving forward.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

When trading OFX Group or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.