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Most Shareholders Will Probably Agree With EQT Holdings Limited's (ASX:EQT) CEO Compensation

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Under the guidance of CEO Mick O’Brien, EQT Holdings Limited (ASX:EQT) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 22 October 2021. We present our case of why we think CEO compensation looks fair.

Check out our latest analysis for EQT Holdings

How Does Total Compensation For Mick O’Brien Compare With Other Companies In The Industry?

At the time of writing, our data shows that EQT Holdings Limited has a market capitalization of AU$589m, and reported total annual CEO compensation of AU$1.3m for the year to June 2021. That's a notable increase of 35% on last year. In particular, the salary of AU$712.7k, makes up a fairly large portion of the total compensation being paid to the CEO.

On examining similar-sized companies in the industry with market capitalizations between AU$270m and AU$1.1b, we discovered that the median CEO total compensation of that group was AU$1.0m. This suggests that EQT Holdings remunerates its CEO largely in line with the industry average. Furthermore, Mick O’Brien directly owns AU$2.1m worth of shares in the company, implying that they are deeply invested in the company's success.

Component

2021

2020

Proportion (2021)

Salary

AU$713k

AU$713k

55%

Other

AU$577k

AU$243k

45%

Total Compensation

AU$1.3m

AU$957k

100%

Speaking on an industry level, nearly 61% of total compensation represents salary, while the remainder of 39% is other remuneration. There isn't a significant difference between EQT Holdings and the broader market, in terms of salary allocation in the overall compensation package. 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.

ceo-compensation
ceo-compensation

EQT Holdings Limited's Growth

EQT Holdings Limited's earnings per share (EPS) grew 1.7% per year over the last three years. In the last year, its revenue is up 5.9%.

We'd prefer higher revenue growth, but we're happy with the modest EPS growth. It's clear the performance has been quite decent, but it it falls short of outstanding,based on this information. 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 EQT Holdings Limited Been A Good Investment?

Boasting a total shareholder return of 34% over three years, EQT Holdings Limited has done well by shareholders. 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...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 1 warning sign for EQT Holdings that you should be aware of before investing.

Switching gears from EQT Holdings, 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.

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 (at) simplywallst.com.

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