Yahoo Finance Is Rio Tinto Group's (LON:RIO) CEO Paid At A Competitive Rate?
J-S Jacques has been the CEO of Rio Tinto Group (LON:RIO) since 2016. This analysis aims first to contrast CEO compensation with other large companies. Then we'll look at a snap shot of the business growth. 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.
Check out our latest analysis for Rio Tinto Group
How Does J-S Jacques's Compensation Compare With Similar Sized Companies?
According to our data, Rio Tinto Group has a market capitalization of UK£69b, and paid its CEO total annual compensation worth US$6.1m over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$1.5m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. When we examined a group of companies with market caps over US$8.0b, we found that their median CEO total compensation was US$4.9m. There aren't very many mega-cap companies, so we had to take a wide range to get a meaningful comparison figure.
So J-S Jacques is paid around the average of the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
You can see, below, how CEO compensation at Rio Tinto Group has changed over time.
Is Rio Tinto Group Growing?
On average over the last three years, Rio Tinto Group has grown earnings per share (EPS) by 56% each year (using a line of best fit). It achieved revenue growth of 1.7% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Shareholders might be interested in this free visualization of analyst forecasts.
Has Rio Tinto Group Been A Good Investment?
Most shareholders would probably be pleased with Rio Tinto Group for providing a total return of 80% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
In Summary...
J-S Jacques is paid around what is normal the leaders of larger companies.
Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. So you may want to check if insiders are buying Rio Tinto Group shares with their own money (free access).
Important note: Rio Tinto Group may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
