Yahoo Finance Here's Why Shareholders May Want To Be Cautious With Increasing Castle Minerals Limited's (ASX:CDT) CEO Pay Packet
Key Insights
Castle Minerals will host its Annual General Meeting on 10th of November
CEO Stephen Stone's total compensation includes salary of AU$230.2k
The overall pay is comparable to the industry average
Castle Minerals' EPS declined by 4.3% over the past three years while total shareholder loss over the past three years was 8.3%
In the past three years, the share price of Castle Minerals Limited (ASX:CDT) has struggled to generate growth for its shareholders. Per share earnings growth is also lacking, despite revenue growth. In light of this performance, shareholders will have a chance to question the board in the upcoming AGM on 10th of November, where they can impact on future company performance by voting on resolutions, including executive compensation. Here's our take on why we think shareholders might be hesitant about approving a raise at the moment.
Check out our latest analysis for Castle Minerals
How Does Total Compensation For Stephen Stone Compare With Other Companies In The Industry?
At the time of writing, our data shows that Castle Minerals Limited has a market capitalization of AU$13m, and reported total annual CEO compensation of AU$325k for the year to June 2023. That's a modest increase of 7.8% on the prior year. Notably, the salary which is AU$230.2k, represents most of the total compensation being paid.
In comparison with other companies in the Australian Metals and Mining industry with market capitalizations under AU$310m, the reported median total CEO compensation was AU$390k. So it looks like Castle Minerals compensates Stephen Stone in line with the median for the industry. Furthermore, Stephen Stone directly owns AU$612k worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | AU$230k | AU$229k | 71% |
Other | AU$95k | AU$73k | 29% |
Total Compensation | AU$325k | AU$302k | 100% |
On an industry level, around 61% of total compensation represents salary and 39% is other remuneration. Castle Minerals pays out 71% of remuneration in the form of a salary, significantly higher than the industry average. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Castle Minerals Limited's Growth
Over the last three years, Castle Minerals Limited has shrunk its earnings per share by 4.3% per year. Its revenue is up 7,337% over the last year.
Investors would be a bit wary of companies that have lower EPS But in contrast the revenue growth is strong, suggesting future potential for EPS growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 Castle Minerals Limited Been A Good Investment?
With a three year total loss of 8.3% for the shareholders, Castle Minerals Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
The returns to shareholders is disappointing along with lack of earnings growth, which goes some way in explaining the poor returns. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 6 warning signs for Castle Minerals (4 are significant!) that you should be aware of before investing here.
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.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
