Does Cannindah Resources Limited's (ASX:CAE) CEO Pay Matter?
Tom Pickett is the CEO of Cannindah Resources Limited (ASX:CAE). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. 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.
Check out our latest analysis for Cannindah Resources
How Does Tom Pickett's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Cannindah Resources Limited has a market cap of AU$1.9m, and reported total annual CEO compensation of AU$274k for the year to June 2019. We think total compensation is more important but we note that the CEO salary is lower, at AU$250k. We took a group of companies with market capitalizations below AU$306m, and calculated the median CEO total compensation to be AU$390k.
Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Cannindah Resources stands. Talking in terms of the sector, salary represented approximately 69% of total compensation out of all the companies we analysed, while other remuneration made up 31% of the pie. Cannindah Resources pays out 91% of aggregate payment in the shape of a salary, which is significantly higher than the industry average.
So Tom Pickett receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context. You can see, below, how CEO compensation at Cannindah Resources has changed over time.
Is Cannindah Resources Limited Growing?
On average over the last three years, Cannindah Resources Limited has shrunk earnings per share by 10% each year (measured with a line of best fit). In the last year, its revenue is down 75%.
Sadly for shareholders, earnings per share are actually down, over three years. This is compounded by the fact revenue is actually down on last year. 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 could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Cannindah Resources Limited Been A Good Investment?
With a three year total loss of 65%, Cannindah Resources Limited would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary...
Tom Pickett is paid around what is normal for the leaders of comparable size companies.
The company isn't growing EPS, and shareholder returns have been disappointing. Few would argue that it's wise for the company to pay any more, before returns improve. On another note, Cannindah Resources has 6 warning signs (and 4 which shouldn't be ignored) we think you should know about.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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