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
The total compensation is similar to the average for the industry
Oceania Healthcare’s EPS declined by 36% over the past three years while total shareholder loss over the past three years was 62%
Shareholders will probably not be too impressed with the underwhelming results at Oceania Healthcare Limited (NZSE:OCA) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 27th of June. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.
See our latest analysis for Oceania Healthcare
Comparing Oceania Healthcare Limited’s CEO Compensation With 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. That’s mostly flat as compared to the prior year’s compensation. Notably, the salary which is NZ$754.7k, represents most of the total compensation being paid.
On comparing similar companies from the New Zealander Healthcare industry with market caps ranging from NZ$163m to NZ$653m, we found that the median CEO total compensation was NZ$1.2m. From this we gather that Brent Pattison is paid around the median for CEOs in the industry. What’s more, Brent Pattison holds NZ$207k worth of shares in the company in 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%
On an industry level, around 71% of total compensation represents salary and 29% is other remuneration. There isn’t a significant difference between Oceania Healthcare and the broader market, in terms of salary allocation in the overall compensation package. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
ceo-compensation
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%.
Few shareholders would be pleased to read that EPS have declined. 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.
Story continues
Has Oceania Healthcare Limited Been A Good Investment?
Few Oceania Healthcare Limited shareholders would feel satisfied with the return of -62% over three years. So shareholders would probably want the company to be less generous with CEO compensation.
To Conclude…
Given that shareholders haven’t seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.
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. We did our research and identified 2 warning signs (and 1 which shouldn’t be ignored) in Oceania Healthcare we think you should know about.
Important note: Oceania Healthcare is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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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.
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Publish date : 2024-06-20 14:02:46
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