Yahoo Finance Is Atlas Pearls Ltd's (ASX:ATP) CEO Salary Justified?
The CEO of Atlas Pearls Ltd (ASX:ATP) is Geoff Newman. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
View our latest analysis for Atlas Pearls
How Does Geoff Newman's Compensation Compare With Similar Sized Companies?
Our data indicates that Atlas Pearls Ltd is worth AU$3.2m, and total annual CEO compensation was reported as AU$78k for the year to June 2019. We think total compensation is more important but we note that the CEO salary is lower, at . We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We examined a group of similar sized companies, with market capitalizations of below AU$293m. The median CEO total compensation in that group is AU$380k.
A first glance this seems like a real positive for shareholders, since Geoff Newman is paid less than the average total compensation paid by similar sized companies. Though positive, it's important we delve into the performance of the actual business.
You can see, below, how CEO compensation at Atlas Pearls has changed over time.
Is Atlas Pearls Ltd Growing?
Over the last three years Atlas Pearls Ltd has shrunk its earnings per share by an average of 105% per year (measured with a line of best fit). In the last year, its revenue is up 15%.
Unfortunately, earnings per share have trended lower over the last three years. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Atlas Pearls Ltd Been A Good Investment?
Since shareholders would have lost about 84% over three years, some Atlas Pearls Ltd shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
It looks like Atlas Pearls Ltd pays its CEO less than similar sized companies.
Geoff Newman is paid less than CEOs of similar size companies, but the company isn't growing and total shareholder returns have been disappointing. While one could argue it is appropriate for the CEO to be paid less than other CEOs of similar sized companies, given company performance, we would not call the pay overly generous. Shareholders may want to check for free if Atlas Pearls insiders are buying or selling shares.
If you want to buy a stock that is better than Atlas Pearls, this free list of high return, low debt companies is a great place to look.
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 editorial-team@simplywallst.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. Thank you for reading.
