This article will reflect on the compensation paid to Chris Ringrose who has served as CEO of Cullen Resources Limited (ASX:CUL) since 2006. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Cullen Resources.
Comparing Cullen Resources Limited's CEO Compensation With the industry
Our data indicates that Cullen Resources Limited has a market capitalization of AU$8.4m, and total annual CEO compensation was reported as AU$206k for the year to June 2020. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at AU$180.0k constitutes the majority of total compensation received by the CEO.
On comparing similar-sized companies in the industry with market capitalizations below AU$279m, we found that the median total CEO compensation was AU$303k. That is to say, Chris Ringrose is paid under the industry median.
On an industry level, around 69% of total compensation represents salary and 31% is other remuneration. According to our research, Cullen Resources has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
A Look at Cullen Resources Limited's Growth Numbers
Cullen Resources Limited's earnings per share (EPS) grew 25% per year over the last three years. In the last year, its revenue is up 1,657%.
Shareholders would be glad to know that the company has improved itself over the last few years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 Cullen Resources Limited Been A Good Investment?
Since shareholders would have lost about 30% over three years, some Cullen Resources Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
As we touched on above, Cullen Resources Limited is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Importantly though, the company has impressed with its EPS growth over three years. Although we would've liked to see positive investor returns, it would be bold of us to criticize CEO compensation when EPS are up. But shareholders will likely want to hold off on any raise for Chris until investor returns are positive.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 5 warning signs for Cullen Resources you should be aware of, and 4 of them are concerning.
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.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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