Oceania Healthcare Limited's (NZSE:OCA) CEO Might Not Expect Shareholders To Be So Generous This Year

Key Insights

• Oceania Healthcare will host its Annual General Meeting on 27th of June
• CEO Brent Pattison's total compensation includes salary of NZ$754.7k
• Total compensation is similar to the industry average
• Oceania Healthcare's three-year loss to shareholders was 62% while its EPS was down 36% over the past three years

The results at Oceania Healthcare Limited (NZSE:OCA) have been quite disappointing recently and CEO Brent Pattison bears some responsibility for this. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 27th of June. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for Oceania Healthcare

How Does Total Compensation For Brent Pattison Compare With Other Companies In The Industry?

According to our data, Oceania Healthcare Limited has a market capitalization of NZ$369m, and paid its CEO total annual compensation worth NZ$1.1m over the year to March 2024. This means that the compensation hasn't changed much from last year. We note that the salary portion, which stands at NZ$754.7k constitutes the majority of total compensation received by the CEO.

On examining similar-sized companies in the New Zealander Healthcare industry with market capitalizations between NZ$163m and NZ$653m, we discovered that the median CEO total compensation of that group was NZ$1.2m. So it looks like Oceania Healthcare compensates Brent Pattison in line with the median for the industry. Moreover, Brent Pattison also holds NZ$207k worth of Oceania Healthcare stock directly under their own name.

Component	2024	2023	Proportion (2024)
Salary	NZ$755k	NZ$729k	66%
Other	NZ$384k	NZ$416k	34%
Total Compensation	NZ$1.1m	NZ$1.1m	100%

Talking in terms of the industry, salary represented approximately 71% of total compensation out of all the companies we analyzed, while other remuneration made up 29% of the pie. Although there is a difference in how total compensation is set, Oceania Healthcare more or less reflects the market in terms of setting the salary. 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.

Oceania Healthcare Limited's Growth

Oceania Healthcare Limited has reduced its earnings per share by 36% a year over the last three years. In the last year, its revenue is up 7.4%.

The decline in EPS is a bit concerning. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Oceania Healthcare Limited Been A Good Investment?

Few Oceania Healthcare Limited shareholders would feel satisfied with the return of -62% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

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 2 warning signs for Oceania Healthcare (of which 1 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Oceania Healthcare, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com