Andrew Mackenzie has been the CEO of BHP Group Plc (LON:BHP) since 2013. First, this article will compare CEO compensation with compensation at other large companies. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

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How Does Andrew Mackenzie’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that BHP Group Plc has a market cap of UK£84b, and is paying total annual CEO compensation of US$8.1m. (This figure is for the year to 2018). While we always look at total compensation first, we note that the salary component is less, at US$1.7m. We looked at a group of companies with market capitalizations over US$8.0b and the median CEO compensation was US$5.1m. Once you start looking at very large companies, you need to take a broader range, because there simply aren’t that many of them.

It would therefore appear that BHP Group Plc pays Andrew Mackenzie more than the median CEO remuneration at large companies, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see, below, how CEO compensation at BHP Group has changed over time.

Is BHP Group Plc Growing?

BHP Group Plc has increased its earnings per share (EPS) by an average of 79% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 20%.

This demonstrates that the company has been improving recently. A good result. It’s also good to see decent revenue growth in the last year, suggesting the business is healthy and growing.

It could be important to check this free visual depiction of what analysts expect for the future.

Has BHP Group Plc Been A Good Investment?

Boasting a total shareholder return of 198% over three years, BHP Group Plc has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary…

We compared total CEO remuneration at BHP Group Plc with the amount paid at other large companies. We found that it pays well over the median amount paid in the benchmark group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. Even better, returns to shareholders have been plentiful, over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling BHP Group (free visualization of insider trades).

Of course, the past can be informative so you might be interested in considering this analytical visualization showing the company history of earnings and revenue.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.