Yahoo Finance What We Learned About Middle Island Resources' (ASX:MDI) CEO Pay
This article will reflect on the compensation paid to Rick Yeates who has served as CEO of Middle Island Resources Limited (ASX:MDI) since 2010. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Middle Island Resources.
Check out our latest analysis for Middle Island Resources
Comparing Middle Island Resources Limited's CEO Compensation With the industry
At the time of writing, our data shows that Middle Island Resources Limited has a market capitalization of AU$44m, and reported total annual CEO compensation of AU$237k for the year to June 2020. Notably, that's a decrease of 8.7% over the year before. In particular, the salary of AU$216.7k, makes up a huge portion of the total compensation being paid to the CEO.
For comparison, other companies in the industry with market capitalizations below AU$277m, reported a median total CEO compensation of AU$309k. So it looks like Middle Island Resources compensates Rick Yeates in line with the median for the industry. What's more, Rick Yeates holds AU$1.5m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2020 | 2019 | Proportion (2020) |
Salary | AU$217k | AU$210k | 91% |
Other | AU$21k | AU$50k | 9% |
Total Compensation | AU$237k | AU$260k | 100% |
Talking in terms of the industry, salary represented approximately 70% of total compensation out of all the companies we analyzed, while other remuneration made up 30% of the pie. It's interesting to note that Middle Island Resources pays out a greater portion of remuneration through salary, compared to the industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Middle Island Resources Limited's Growth
Over the past three years, Middle Island Resources Limited has seen its earnings per share (EPS) grow by 42% per year. It saw its revenue drop 61% over the last year.
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. 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 Middle Island Resources Limited Been A Good Investment?
With a three year total loss of 34% for the shareholders, Middle Island Resources Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.
In Summary...
As we touched on above, Middle Island Resources Limited is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. At the same time, the company has logged negative shareholder returns 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 pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 5 warning signs for Middle Island Resources you should be aware of, and 2 of them are concerning.
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.
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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