Yahoo Finance Key Things To Understand About Castle Minerals' (ASX:CDT) CEO Pay Cheque
Stephen Stone has been the CEO of Castle Minerals Limited (ASX:CDT) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
See our latest analysis for Castle Minerals
Comparing Castle Minerals Limited's CEO Compensation With the industry
According to our data, Castle Minerals Limited has a market capitalization of AU$6.6m, and paid its CEO total annual compensation worth AU$226k over the year to June 2020. We note that's an increase of 74% above last year. Notably, the salary which is AU$156.6k, represents most of the total compensation being paid.
On comparing similar-sized companies in the industry with market capitalizations below AU$268m, we found that the median total CEO compensation was AU$310k. From this we gather that Stephen Stone is paid around the median for CEOs in the industry. Moreover, Stephen Stone also holds AU$468k worth of Castle Minerals stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2020 | 2019 | Proportion (2020) |
Salary | AU$157k | AU$119k | 69% |
Other | AU$69k | AU$11k | 31% |
Total Compensation | AU$226k | AU$130k | 100% |
On an industry level, around 69% of total compensation represents salary and 31% is other remuneration. Although there is a difference in how total compensation is set, Castle Minerals more or less reflects the market in terms of setting the salary. 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
Castle Minerals Limited's earnings per share (EPS) grew 25% per year over the last three years. In the last year, its revenue is down 88%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Castle Minerals Limited Been A Good Investment?
Since shareholders would have lost about 68% over three years, some Castle Minerals Limited investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
As previously discussed, Stephen is compensated close to the median for companies of its size, and which belong to the same industry. Meanwhile, shareholder returns paint a sorry picture for the company, finishing in the red over the last three years. However, EPS growth is positive over the same time frame. It's tough for us to say CEO compensation is too generous when EPS growth is positive, but negative investor returns will irk shareholders and reduce any chances of a raise.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 5 warning signs for Castle Minerals (of which 4 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.
Important note: Castle Minerals is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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. 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.
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