In 2006 Chris Ringrose was appointed CEO of Cullen Resources Limited (ASX:CUL). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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 Chris Ringrose's Compensation Compare With Similar Sized Companies?
According to our data, Cullen Resources Limited has a market capitalization of AU$2.3m, and paid its CEO total annual compensation worth AU$206k over the year to June 2019. That's actually a decrease on the year before. We think total compensation is more important but we note that the CEO salary is lower, at AU$180k. We examined a group of similar sized companies, with market capitalizations of below AU$292m. The median CEO total compensation in that group is AU$380k.
Most shareholders would consider it a positive that Chris Ringrose takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.
You can see, below, how CEO compensation at Cullen Resources has changed over time.
Is Cullen Resources Limited Growing?
Cullen Resources Limited has increased its earnings per share (EPS) by an average of 21% a year, over the last three years (using a line of best fit). In the last year, its revenue is down 95%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Cullen Resources Limited Been A Good Investment?
Since shareholders would have lost about 71% over three years, some Cullen Resources Limited shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
It appears that Cullen Resources Limited remunerates its CEO below most similar sized companies.
Since the business is growing, many would argue this suggests the pay is modest. Few would deny that the total shareholder return over the last three years could have been a lot better. We're not critical of the remuneration Chris Ringrose receives, but it would be good to see improved returns to shareholders before the remuneration grows too much. This sort of circumstance certainly justifies further research, because the investment returns might still come in the future. Whatever your view on compensation, you might want to check if insiders are buying or selling Cullen Resources shares (free trial).
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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