In 2013 Nigel Garrard was appointed CEO of Orora Limited (ASX:ORA). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Nigel Garrard’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Orora Limited has a market cap of AU$3.5b, and is paying total annual CEO compensation of AU$3.8m. (This figure is for the year to June 2018). We think total compensation is more important but we note that the CEO salary is lower, at AU$1.3m. We looked at a group of companies with market capitalizations from AU$2.8b to AU$9.0b, and the median CEO total compensation was AU$3.3m.
So Nigel Garrard is paid around the average of the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.
You can see a visual representation of the CEO compensation at Orora, below.
Is Orora Limited Growing?
On average over the last three years, Orora Limited has grown earnings per share (EPS) by 12% each year (using a line of best fit). It achieved revenue growth of 7.1% over the last year.
This demonstrates that the company has been improving recently. A good result. It’s good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Shareholders might be interested in this free visualization of analyst forecasts.
Has Orora Limited Been A Good Investment?
With a total shareholder return of 27% over three years, Orora Limited shareholders would, in general, be reasonably content. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
Nigel Garrard is paid around what is normal the leaders of comparable size companies.
Shareholder returns could be better but shareholders would be pleased with the positive EPS growth. As a result of these considerations, I would suggest the CEO pay is reasonable. So you may want to check if insiders are buying Orora shares with their own money (free access).
Important note: Orora 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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