Despite strong share price growth of 102% for Antofagasta plc (LON:ANTO) over the last few years, earnings growth has been disappointing, which suggests something is amiss. The upcoming AGM on 12 May 2021 may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

Check out our latest analysis for Antofagasta

How Does Total Compensation For Ivan Arriagada Herrera Compare With Other Companies In The Industry?

At the time of writing, our data shows that Antofagasta plc has a market capitalization of UK£19b, and reported total annual CEO compensation of US$3.9m for the year to December 2020. We note that's an increase of 60% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$589k.

On comparing similar companies in the industry with market capitalizations above UK£5.8b, we found that the median total CEO compensation was US$3.3m. From this we gather that Ivan Arriagada Herrera is paid around the median for CEOs in the industry.

On an industry level, roughly 65% of total compensation represents salary and 35% is other remuneration. In Antofagasta's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Antofagasta plc's Growth

Over the last three years, Antofagasta plc has shrunk its earnings per share by 13% per year. It achieved revenue growth of 3.4% over the last year.

The decline in EPS is a bit concerning. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Antofagasta plc Been A Good Investment?

Most shareholders would probably be pleased with Antofagasta plc for providing a total return of 102% over three years. 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…

While the return to shareholders does look promising, it's hard to ignore the lack of earnings growth and this makes us question whether these strong returns will continue. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Antofagasta that you should be aware of before investing.

Switching gears from Antofagasta, 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. 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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