Is ORBIS AG’s (ETR:OBS) CEO Overpaid Relative To Its Peers?

Thomas Gard is the CEO of ORBIS AG (ETR:OBS). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for ORBIS

How Does Thomas Gard’s Compensation Compare With Similar Sized Companies?

Our data indicates that ORBIS AG is worth €56m, and total annual CEO compensation is €522k. (This is based on the year to December 2017). We think total compensation is more important but we note that the CEO salary is lower, at €241k. We examined a group of similar sized companies, with market capitalizations of below €178m. The median CEO total compensation in that group is €230k.

As you can see, Thomas Gard is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean ORBIS AG is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see a visual representation of the CEO compensation at ORBIS, below.

XTRA:OBS CEO Compensation, April 9th 2019
XTRA:OBS CEO Compensation, April 9th 2019

Is ORBIS AG Growing?

ORBIS AG has increased its earnings per share (EPS) by an average of 8.1% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 11%.

I think the revenue growth is good. And the improvement in earnings per share is modest but respectable. So while performance isn’t amazing, we think it really does seem quite respectable. Shareholders might be interested in this free visualization of analyst forecasts.

Has ORBIS AG Been A Good Investment?

I think that the total shareholder return of 109%, over three years, would leave most ORBIS AG shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary…

We examined the amount ORBIS AG pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

While we generally prefer to see stronger EPS growth, there’s no arguing with the strong returns to shareholders, over the last three years. Considering this fine result for investors, we daresay the CEO compensation might be apt. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at ORBIS.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.