Yahoo Finance Is Lodestar Minerals Limited's (ASX:LSR) CEO Paid Enough Relative To Peers?
In 2007, Bill Clayton was appointed CEO of Lodestar Minerals Limited (ASX:LSR). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. 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.
View 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$5.1m, and paid its CEO total annual compensation worth AU$265k over the year to June 2019. We think total compensation is more important but we note that the CEO salary is lower, at AU$181k. We took a group of companies with market capitalizations below AU$306m, and calculated the median CEO total compensation to be AU$384k.
Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Lodestar Minerals stands. Talking in terms of the sector, salary represented approximately 70% of total compensation out of all the companies we analysed, while other remuneration made up 30% of the pie. So it seems like there isn't a significant difference between Lodestar Minerals and the broader market, in terms of salary allocation in the overall compensation package.
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 Lodestar Minerals has changed over time.
Is Lodestar Minerals Limited Growing?
Over the last three years Lodestar Minerals Limited has seen earnings per share (EPS) move in a positive direction by an average of 25% per year (using a line of best fit). Its revenue is down 82% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. While it would be good to see revenue growth, profits matter more in the end. 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?
Given the total loss of 45% over three years, many shareholders in Lodestar Minerals Limited are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid 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. Unfortunately, some shareholders may be disappointed with their returns, given the company's performance over the last three years. So while we don't think, Bill Clayton is paid too much, shareholders may hope that business performance translates to investment returns before pay rises are given out. 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. Shifting gears from CEO pay for a second, we've spotted 5 warning signs for Lodestar Minerals you should be aware of, and 3 of them make us uncomfortable.
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.
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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. Thank you for reading.
