A Quick Analysis On OPG Power Ventures' (LON:OPG) CEO Compensation

This article will reflect on the compensation paid to Arvind Gupta who has served as CEO of OPG Power Ventures Plc (LON:OPG) since 2008. This analysis will also assess whether OPG Power Ventures pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for OPG Power Ventures

Comparing OPG Power Ventures Plc's CEO Compensation With the industry

According to our data, OPG Power Ventures Plc has a market capitalization of UK£51m, and paid its CEO total annual compensation worth UK£500k over the year to March 2020. That's mostly flat as compared to the prior year's compensation. It is worth noting that the CEO compensation consists entirely of the salary, worth UK£500k.

On comparing similar-sized companies in the industry with market capitalizations below UK£150m, we found that the median total CEO compensation was UK£191k. Accordingly, our analysis reveals that OPG Power Ventures Plc pays Arvind Gupta north of the industry median. Furthermore, Arvind Gupta directly owns UK£1.7m worth of shares in the company.

On an industry level, around 56% of total compensation represents salary and 44% is other remuneration. At the company level, OPG Power Ventures pays Arvind Gupta solely through a salary, preferring to go down a conventional route. 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.

OPG Power Ventures Plc's Growth

Over the last three years, OPG Power Ventures Plc has shrunk its earnings per share by 38% per year. It achieved revenue growth of 9.5% over the last year.

Few shareholders would be pleased to read that EPS have declined. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has OPG Power Ventures Plc Been A Good Investment?

With a three year total loss of 38% for the shareholders, OPG Power Ventures Plc would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

OPG Power Ventures pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As previously discussed, Arvind is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. Unfortunately, this doesn't look great when you see shareholder returns have been negative over the last three years. What's equally worrying is that the company isn't growing by our analysis. Overall, with such poor performance, shareholder's would probably have questions if the company decided to give the CEO a raise.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 4 warning signs (and 1 which is a bit unpleasant) in OPG Power Ventures we think you should know about.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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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