Yahoo Finance Does Leaf Resources Limited’s (ASX:LER) CEO Pay Reflect Performance?
Ken Richards became the CEO of Leaf Resources Limited (ASX:LER) in 2011. 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.
Check out our latest analysis for Leaf Resources
How Does Ken Richards’s Compensation Compare With Similar Sized Companies?
Our data indicates that Leaf Resources Limited is worth AU$16m, and total annual CEO compensation is AU$398k. (This is based on the year to 2018). We think total compensation is more important but we note that the CEO salary is lower, at AU$325k. We took a group of companies with market capitalizations below AU$282m, and calculated the median CEO compensation to be AU$368k.
That means Ken Richards receives fairly typical remuneration for the CEO of a company that size. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.
You can see, below, how CEO compensation at Leaf Resources has changed over time.
Is Leaf Resources Limited Growing?
Over the last three years Leaf Resources Limited has shrunk its earnings per share by an average of 18% per year. It saw its revenue drop -44% over the last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the fact that revenue is down year on year arguably paints an ugly picture. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.
Although we don’t have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Leaf Resources Limited Been A Good Investment?
With a three year total loss of 55%, Leaf Resources Limited would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
In Summary…
Ken Richards is paid around what is normal the leaders of comparable size companies.
Returns have been disappointing and the company is not growing its earnings per share. Suffice it to say, we don’t think the CEO is underpaid! Shareholders may want to check for free if Leaf Resources insiders are buying or selling shares.
Or you might prefer examine intently this intuitive graph showing past earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
