Yahoo Finance How Should Investors Feel About Lodestar Minerals Limited’s (ASX:LSR) CEO Pay?
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Bill Clayton became the CEO of Lodestar Minerals Limited (ASX:LSR) in 2007. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
See our latest analysis for Lodestar Minerals
How Does Bill Clayton’s Compensation Compare With Similar Sized Companies?
According to our data, Lodestar Minerals Limited has a market capitalization of AU$7.5m, and pays its CEO total annual compensation worth AU$168k. (This number is for the twelve months until 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at AU$147k. We examined a group of similar sized companies, with market capitalizations of below AU$281m. The median CEO compensation in that group is AU$362k.
A first glance this seems like a real positive for shareholders, since Bill Clayton is paid less than the average compensation paid by similar sized companies. Though positive, it’s important we delve into the performance of the actual business.
You can see, below, how CEO compensation at Lodestar Minerals has changed over time.
Is Lodestar Minerals Limited Growing?
Lodestar Minerals Limited has increased its earnings per share (EPS) by an average of 20% a year, over the last three years (using a line of best fit). Its revenue is up 945% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Although we don’t have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Lodestar Minerals Limited Been A Good Investment?
Since shareholders would have lost about 67% over three years, some Lodestar Minerals Limited shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary…
Lodestar Minerals Limited is currently paying its CEO below what is normal for companies of its size. Considering the underlying business is growing earnings, this would suggest the pay is modest. Despite some positives, it is likely that shareholders wanted better returns, given the performance over the last three years. So while we would not say that Bill Clayton is generously paid, it would be good to see an improvement in business performance before too an increase in pay.
When I see fairly low remuneration, combined with earnings per share growth, but without big share price gains, it makes me want to research the potential for future gains. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Lodestar Minerals.
If you want to buy a stock that is better than Lodestar Minerals, this free list of high return, low debt companies is a great place to look.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. On rare occasion, data errors may occur. Thank you for reading.
