Yahoo Finance Here's Why Shareholders May Want To Be Cautious With Increasing PNX Metals Limited's (ASX:PNX) CEO Pay Packet
Key Insights
PNX Metals' Annual General Meeting to take place on 9th of November
CEO James Fox's total compensation includes salary of AU$319.3k
The overall pay is comparable to the industry average
Over the past three years, PNX Metals' EPS grew by 37% and over the past three years, the total loss to shareholders 70%
Shareholders of PNX Metals Limited (ASX:PNX) will have been dismayed by the negative share price return over the last three years. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. The AGM coming up on the 9th of November could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.
See our latest analysis for PNX Metals
How Does Total Compensation For James Fox Compare With Other Companies In The Industry?
Our data indicates that PNX Metals Limited has a market capitalization of AU$16m, and total annual CEO compensation was reported as AU$444k for the year to June 2023. That's a modest increase of 4.6% on the prior year. We note that the salary portion, which stands at AU$319.3k constitutes the majority of total compensation received by the CEO.
On comparing similar-sized companies in the Australian Metals and Mining industry with market capitalizations below AU$314m, we found that the median total CEO compensation was AU$390k. From this we gather that James Fox is paid around the median for CEOs in the industry.
Component | 2023 | 2022 | Proportion (2023) |
Salary | AU$319k | AU$298k | 72% |
Other | AU$125k | AU$127k | 28% |
Total Compensation | AU$444k | AU$425k | 100% |
On an industry level, roughly 61% of total compensation represents salary and 39% is other remuneration. PNX Metals is paying a higher share of its remuneration through a salary in comparison to the overall 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.
PNX Metals Limited's Growth
PNX Metals Limited has seen its earnings per share (EPS) increase by 37% a year over the past three years. In the last year, the company lost virtually all of its revenue.
Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has PNX Metals Limited Been A Good Investment?
Few PNX Metals Limited shareholders would feel satisfied with the return of -70% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 6 warning signs (and 4 which are potentially serious) in PNX Metals we think you should know about.
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.
