In 2012 Willie Labuschagne was appointed CEO of Aeris Resources Limited (ASX:AIS). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Willie Labuschagne's Compensation Compare With Similar Sized Companies?
According to our data, Aeris Resources Limited has a market capitalization of AU$22m, and paid its CEO total annual compensation worth AU$1.1m over the year to June 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$554k. We examined a group of similar sized companies, with market capitalizations of below AU$305m. The median CEO total compensation in that group is AU$386k.
Thus we can conclude that Willie Labuschagne receives more in total compensation than the median of a group of companies in the same market, and of similar size to Aeris Resources Limited. However, this doesn't necessarily mean the pay 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 a visual representation of the CEO compensation at Aeris Resources, below.
Is Aeris Resources Limited Growing?
Aeris Resources Limited has increased its earnings per share (EPS) by an average of 47% a year, over the last three years (using a line of best fit). It saw its revenue drop 1.6% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. While it would be good to see revenue growth, profits matter more in the end. Although we don't have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Aeris Resources Limited Been A Good Investment?
With a total shareholder return of 10% over three years, Aeris Resources Limited shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
We examined the amount Aeris Resources Limited pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. Looking at the same time period, we think that the shareholder returns are respectable. So, considering the EPS growth we do not wish to criticize the level of CEO compensation, though we'd recommend further research on management. So you may want to check if insiders are buying Aeris Resources 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.
If you spot an error that warrants correction, please contact the editor at email@example.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.
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