John Wren became the CEO of Omnicom Group Inc (NYSE:OMC) in 1997. This analysis aims first to contrast CEO compensation with other large companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does John Wren’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Omnicom Group Inc has a market cap of US$15.4b, and is paying total annual CEO compensation of US$24m. That’s below the compensation, last year. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO compensation to be US$11m.
It would therefore appear that Omnicom Group Inc pays John Wren more than the median CEO remuneration at large companies, in the same market. However, this fact alone doesn’t mean the remuneration is too high. 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, below, how CEO compensation at Omnicom Group has changed over time.
Is Omnicom Group Inc Growing?
On average over the last three years, Omnicom Group Inc has grown earnings per share (EPS) by 4.4% each year. In the last year, its revenue changed by just -0.2%.
I generally like to see a little revenue growth, but it is good to see EPS growth. These two metric are moving in different directions, so while it’s hard to be confident judging performance, we think the stock is worth watching.
You might want to check this free visual report on analyst forecasts for future earnings.
Has Omnicom Group Inc Been A Good Investment?
Omnicom Group Inc has generated a total shareholder return of 5.6% over three years, so most shareholders wouldn’t be too disappointed. But they probably wouldn’t be so happy as to think the CEO should be paid more than is normal, for companies around this size.
We examined the amount Omnicom Group Inc pays its CEO, and compared it to the amount paid by other large companies. We found that it pays well over the median amount paid in the benchmark group.
We generally prefer to see stronger EPS growth, and we’re not particularly impressed with the total shareholder return, over the last three years. In conclusion we think the company should definitely focus on improving the business before awarding any large pay rises. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Omnicom Group Inc (free visualization of insider trades).
Or you might prefer gaze upon this detailed graph of past earnings, revenue and cash flow .
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.