Lindsay Reed has been the CEO of Minbos Resources Limited (ASX:MNB) since 2014. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Lindsay Reed's Compensation Compare With Similar Sized Companies?
According to our data, Minbos Resources Limited has a market capitalization of AU$5.7m, and paid its CEO total annual compensation worth AU$271k over the year to June 2019. While we always look at total compensation first, we note that the salary component is less, at AU$225k. We examined a group of similar sized companies, with market capitalizations of below AU$334m. The median CEO total compensation in that group is AU$404k.
A first glance this seems like a real positive for shareholders, since Lindsay Reed is paid less than the average total compensation paid by similar sized companies. While this is a good thing, you'll need to understand the business better before you can form an opinion.
The graphic below shows how CEO compensation at Minbos Resources has changed from year to year.
Is Minbos Resources Limited Growing?
Minbos Resources Limited has increased its earnings per share (EPS) by an average of 19% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 13%.
This demonstrates that the company has been improving recently. A good result. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. 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 Minbos Resources Limited Been A Good Investment?
Given the total loss of 77% over three years, many shareholders in Minbos Resources Limited are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
It looks like Minbos Resources Limited pays its CEO less than similar sized companies.
Since the business is growing, many would argue this suggests the pay is modest. Despite some positives, it is likely that shareholders wanted better returns, given the performance over the last three years. So while we would not say that Lindsay Reed is generously paid, it would be good to see an improvement in business performance before too an increase in pay. 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 5 warning signs for Minbos Resources (4 make us uncomfortable!) that you should be aware of before investing here.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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