Yahoo Finance How Should Investors React To Chase Mining Corporation Limited's (ASX:CML) CEO Pay?
Leon Pretorius is the CEO of Chase Mining Corporation Limited (ASX:CML). First, this article will compare CEO compensation with compensation at similar sized companies. 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.
See our latest analysis for Chase Mining
How Does Leon Pretorius's Compensation Compare With Similar Sized Companies?
Our data indicates that Chase Mining Corporation Limited is worth AU$3.1m, and total annual CEO compensation is AU$243k. (This number is for the twelve months until June 2018). We think total compensation is more important but we note that the CEO salary is lower, at AU$219k. We examined a group of similar sized companies, with market capitalizations of below AU$280m. The median CEO total compensation in that group is AU$355k.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. Though positive, it's important we delve into the performance of the actual business.
You can see, below, how CEO compensation at Chase Mining has changed over time.
Is Chase Mining Corporation Limited Growing?
Over the last three years Chase Mining Corporation Limited has shrunk its earnings per share by an average of 5.6% per year (measured with a line of best fit). Its revenue is down -34% over last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Chase Mining Corporation Limited Been A Good Investment?
With a three year total loss of 15%, Chase Mining Corporation Limited would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
Chase Mining Corporation Limited is currently paying its CEO below what is normal for companies of its size.
Leon Pretorius is paid less than CEOs of similar size companies, but the company isn't growing and total shareholder returns have been disappointing. We would not call the pay too generous, but nor would we claim the CEO is underpaid, given lacklustre business performance. So you may want to check if insiders are buying Chase Mining shares with their own money (free access).
Important note: Chase Mining may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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. Thank you for reading.
