Yahoo Finance Is Atlas Pearls Ltd's (ASX:ATP) CEO Pay Justified?
The CEO of Atlas Pearls Ltd (ASX:ATP) is Geoff Newman. First, this article will compare CEO compensation with compensation at similar sized companies. 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. 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?
According to our data, Atlas Pearls Ltd has a market capitalization of AU$2.5m, and paid its CEO total annual compensation worth AU$78k over the year to June 2019. We looked at a group of companies with market capitalizations under AU$306m, and the median CEO total compensation was AU$390k.
Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Atlas Pearls. On an industry level, roughly 94% of total compensation represents salary and 6.1% is other remuneration. Speaking on a company level, Atlas Pearls does not pay a salary to Geoff Newman, preferring to remunerate the executive through non-salary compensation.
Most shareholders would consider it a positive that Geoff Newman takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it's important we delve into the performance of the actual business. The graphic below shows how CEO compensation at Atlas Pearls has changed from year to year.
Is Atlas Pearls Ltd Growing?
Over the last three years Atlas Pearls Ltd has shrunk its earnings per share by an average of 91% per year (measured with a line of best fit). Its revenue is up 21% over last year.
Unfortunately, earnings per share have trended lower over the last three years. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for me to put aside my concerns around earnings. 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 you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Atlas Pearls Ltd Been A Good Investment?
With a three year total loss of 79%, Atlas Pearls Ltd would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
It appears that Atlas Pearls Ltd remunerates its CEO below most similar sized companies.
The compensation paid to Geoff Newman is lower than is usual at similar sized companies, but the eps growth is lacking, just like the returns (over three years). 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. Shifting gears from CEO pay for a second, we've spotted 3 warning signs for Atlas Pearls you should be aware of, and 2 of them are significant.
Important note: Atlas Pearls may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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.
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