What Can We Learn About Antofagasta's (LON:ANTO) CEO Compensation?

Iván Arriagada Herrera has been the CEO of Antofagasta plc (LON:ANTO) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Antofagasta.

View our latest analysis for Antofagasta

Comparing Antofagasta plc's CEO Compensation With the industry

At the time of writing, our data shows that Antofagasta plc has a market capitalization of UK£14b, and reported total annual CEO compensation of US$2.7m for the year to December 2019. We note that's an increase of 8.8% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$640k.

For comparison, other companies in the industry with market capitalizations above UK£5.9b, reported a median total CEO compensation of US$2.7m. This suggests that Antofagasta remunerates its CEO largely in line with the industry average.

Speaking on an industry level, nearly 65% of total compensation represents salary, while the remainder of 35% is other remuneration. It's interesting to note that Antofagasta allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Antofagasta plc's Growth Numbers

Antofagasta plc has seen its earnings per share (EPS) increase by 1.3% a year over the past three years. Its revenue is down 11% over the previous year.

We would prefer it if there was revenue growth, but it is good to see a modest EPS growth at least. It's hard to reach a conclusion about business performance right now. This may be one to watch. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Antofagasta plc Been A Good Investment?

Most shareholders would probably be pleased with Antofagasta plc for providing a total return of 73% over three years. 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.

To Conclude...

As previously discussed, Iván is compensated close to the median for companies of its size, and which belong to the same industry. But the company has been found wanting in terms of EPS growth over the past three years. On the other hand, shareholder returns over the same period have been very healthy. So while shareholders shouldn't be overly concerned about CEO compensation, we suspect most would prefer to see improved performance, before a bump in pay.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 2 warning signs for Antofagasta that investors should be aware of in a dynamic business environment.

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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