Yahoo Finance How Should Investors React To Corazon Mining Limited's (ASX:CZN) CEO Pay?
Brett Smith became the CEO of Corazon Mining Limited (ASX:CZN) in 2010. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. 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.
Check out our latest analysis for Corazon Mining
How Does Brett Smith's Compensation Compare With Similar Sized Companies?
According to our data, Corazon Mining Limited has a market capitalization of AU$4.8m, and paid its CEO total annual compensation worth AU$240k over the year to June 2019. Notably, the salary of AU$240k is the vast majority of the CEO compensation. We looked at a group of companies with market capitalizations under AU$324m, and the median CEO total compensation was AU$390k.
A first glance this seems like a real positive for shareholders, since Brett Smith is paid less than the average total 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 Corazon Mining has changed over time.
Is Corazon Mining Limited Growing?
On average over the last three years, Corazon Mining Limited has grown earnings per share (EPS) by 53% each year (using a line of best fit). It achieved revenue growth of 185% over the last year.
This demonstrates that the company has been improving recently. A good result. 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 you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Corazon Mining Limited Been A Good Investment?
Given the total loss of 94% over three years, many shareholders in Corazon Mining Limited are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary...
Corazon Mining 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. Unfortunately, some shareholders may be disappointed with their returns, given the company's performance over the last three years. We're not critical of the remuneration Brett Smith receives, but it would be good to see improved returns to shareholders before the remuneration grows too much. In this case we may want to look deeper into the company. There are some real positives and we could see improved returns in the longer term. CEO compensation is an important area to keep your eyes on, but we've also identified 7 warning signs for Corazon Mining (4 don't sit too well with us!) 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.
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.
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. Thank you for reading.
