Our Take On Objective's (ASX:OCL) CEO Salary

Tony Walls is the CEO of Objective Corporation Limited (ASX:OCL), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Objective

How Does Total Compensation For Tony Walls Compare With Other Companies In The Industry?

Our data indicates that Objective Corporation Limited has a market capitalization of AU$1.2b, and total annual CEO compensation was reported as AU$319k for the year to June 2020. This means that the compensation hasn't changed much from last year. In particular, the salary of AU$279.0k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations ranging from AU$519m to AU$2.1b, the reported median CEO total compensation was AU$1.2m. This suggests that Tony Walls is paid below the industry median.

Talking in terms of the industry, salary represented approximately 60% of total compensation out of all the companies we analyzed, while other remuneration made up 40% of the pie. Objective is paying a higher share of its remuneration through a salary in comparison to the overall industry. 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.

Objective Corporation Limited's Growth

Objective Corporation Limited's earnings per share (EPS) grew 9.7% per year over the last three years. It achieved revenue growth of 13% over the last year.

We think the revenue growth is good. And the improvement in EPSis modest but respectable. So while performance isn't amazing, we think it really does seem quite respectable. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Objective Corporation Limited Been A Good Investment?

Boasting a total shareholder return of 359% over three years, Objective Corporation Limited has done well by shareholders. 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, Objective Corporation Limited is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. On the other hand, shareholder returns have been have been very pleasing, over the last three years, and that should put a smile on the faces of investors. As a result of the juicy return to investors, CEO compensation may well be quite reasonable.

Whatever your view on compensation, you might want to check if insiders are buying or selling Objective shares (free trial).

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.

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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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