Joc O’Rourke became the CEO of The Mosaic Company (NYSE:MOS) in 2015. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Joc O’Rourke's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that The Mosaic Company has a market cap of US$7.9b, and reported total annual CEO compensation of US$11m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.2m. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. We looked at a group of companies with market capitalizations from US$4.0b to US$12b, and the median CEO total compensation was US$6.7m.
Thus we can conclude that Joc O’Rourke receives more in total compensation than the median of a group of companies in the same market, and of similar size to The Mosaic Company. However, this doesn't necessarily mean the pay 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.
The graphic below shows how CEO compensation at Mosaic has changed from year to year.
Is The Mosaic Company Growing?
The Mosaic Company has reduced its earnings per share by an average of 13% a year, over the last three years (measured with a line of best fit). Its revenue is up 2.1% over last year.
Sadly for shareholders, earnings per share are actually down, over three years. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.
Has The Mosaic Company Been A Good Investment?
With a three year total loss of 21%, The Mosaic Company would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We compared the total CEO remuneration paid by The Mosaic Company, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Neither earnings per share nor revenue have been growing sufficiently to impress us, over the last three years. Over the same period, investors would have come away with nothing in the way of share price gains. In our opinion the CEO might be paid too generously! So you may want to check if insiders are buying Mosaic shares with their own money (free access).
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.
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 [email protected]. 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.