Shareholders Will Probably Not Have Any Issues With OpenLearning Limited's (ASX:OLL) CEO Compensation

Key Insights

• OpenLearning's Annual General Meeting to take place on 31st of May
• CEO Adam Brimo's total compensation includes salary of AU$250.0k
• The total compensation is 39% less than the average for the industry
• OpenLearning's EPS grew by 30% over the past three years while total shareholder loss over the past three years was 89%

Performance at OpenLearning Limited (ASX:OLL) has been rather uninspiring recently and shareholders may be wondering how CEO Adam Brimo plans to fix this. At the next AGM coming up on 31st of May, they can influence managerial decision making through voting on resolutions, including executive remuneration. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

View our latest analysis for OpenLearning

Comparing OpenLearning Limited's CEO Compensation With The Industry

According to our data, OpenLearning Limited has a market capitalization of AU$4.3m, and paid its CEO total annual compensation worth AU$294k over the year to December 2023. That's a notable decrease of 10% on last year. Notably, the salary which is AU$250.0k, represents most of the total compensation being paid.

In comparison with other companies in the Australian Software industry with market capitalizations under AU$302m, the reported median total CEO compensation was AU$484k. In other words, OpenLearning pays its CEO lower than the industry median. What's more, Adam Brimo holds AU$111k worth of shares in the company in their own name.

Component	2023	2022	Proportion (2023)
Salary	AU$250k	AU$250k	85%
Other	AU$44k	AU$78k	15%
Total Compensation	AU$294k	AU$328k	100%

Talking in terms of the industry, salary represented approximately 56% of total compensation out of all the companies we analyzed, while other remuneration made up 44% of the pie. OpenLearning is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

OpenLearning Limited's Growth

OpenLearning Limited's earnings per share (EPS) grew 30% per year over the last three years. It saw its revenue drop 28% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. 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 OpenLearning Limited Been A Good Investment?

The return of -89% over three years would not have pleased OpenLearning Limited shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

The fact that shareholders are sitting on a loss is certainly disheartening. This diverges with the robust growth in EPS, suggesting that there is a large discrepancy between share price and fundamentals. There needs to be more focus by management and the board to examine why the share price has diverged from fundamentals. The upcoming AGM will provide shareholders the opportunity to raise their concerns and evaluate if the board’s judgement and decision-making is aligned with their expectations.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 5 warning signs for OpenLearning (of which 4 are a bit unpleasant!) that you should know about in order to have a holistic understanding of the stock.

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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.