What We Learned About Iluka Resources’ (ASX:ILU) CEO Compensation

See our latest analysis for Iluka Resources How Does Total Compensation For Tom Patrick O’Leary Compare With Other Companies In The Industry? At the time of writing, our data shows that Iluka Resources Limited has a market capitalization of AU$4.1b, and reported total annual CEO compensation of AU$3.2m for the […]

ASX:ILU) since 2016. This analysis will also assess whether Iluka Resources pays its CEO appropriately, considering recent earnings growth and total shareholder returns.” data-reactid=”28″>This article will reflect on the compensation paid to Tom Patrick O’Leary who has served as CEO of Iluka Resources Limited (ASX:ILU) since 2016. This analysis will also assess whether Iluka Resources pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Iluka Resources ” data-reactid=”29″> See our latest analysis for Iluka Resources

How Does Total Compensation For Tom Patrick O’Leary Compare With Other Companies In The Industry?

At the time of writing, our data shows that Iluka Resources Limited has a market capitalization of AU$4.1b, and reported total annual CEO compensation of AU$3.2m for the year to December 2019. Notably, that’s an increase of 14% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at AU$1.4m.

On comparing similar companies from the same industry with market caps ranging from AU$2.8b to AU$8.9b, we found that the median CEO total compensation was AU$2.7m. This suggests that Iluka Resources remunerates its CEO largely in line with the industry average. Moreover, Tom Patrick O’Leary also holds AU$3.3m worth of Iluka Resources stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component 2019 2018 Proportion (2019)
Salary AU$1.4m AU$1.4m 44%
Other AU$1.8m AU$1.4m 56%
Total Compensation AU$3.2m AU$2.8m 100%

Speaking on an industry level, nearly 70% of total compensation represents salary, while the remainder of 30% is other remuneration. In Iluka Resources’ case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Iluka Resources Limited’s Growth

Iluka Resources Limited saw earnings per share stay pretty flat over the last three years. In the last year, its revenue is down 4.6%.

this free visual report on analyst forecasts for the company’s future earnings..” data-reactid=”54″>We would argue that the lack of revenue growth in the last year is less than ideal, but the modest improvement in EPS is good. These two metrics are moving in different directions, so while it’s hard to be confident judging performance, we think the stock is worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company’s future earnings..

Has Iluka Resources Limited Been A Good Investment?

Iluka Resources Limited has served shareholders reasonably well, with a total return of 12% over three years. 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.

In Summary…

As we touched on above, Iluka Resources Limited is currently paying a compensation that’s close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. On the other hand, EPS and shareholder returns have been stable over the last three years, but have not grown substantially. Considering the steady performance, it’s tough to call out CEO compensation as too high, but shareholders might want to see more robust growth metrics before agreeing to a future raise.

check for free if Iluka Resources insiders are buying or selling shares.” data-reactid=”59″>Shareholders may want to check for free if Iluka Resources insiders are buying or selling shares.

list of interesting companies that have HIGH return on equity and low debt.” data-reactid=”60″>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.

Get in touch with us directly. Alternatively, email [email protected].” data-reactid=”65″>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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

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