Greg Hall became the CEO of Alligator Energy Limited (ASX:AGE) in 2018, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
How Does Total Compensation For Greg Hall Compare With Other Companies In The Industry?
Our data indicates that Alligator Energy Limited has a market capitalization of AU$19m, and total annual CEO compensation was reported as AU$111k for the year to June 2020. That's a notable decrease of 17% on last year. We note that the salary portion, which stands at AU$74.8k constitutes the majority of total compensation received by the CEO.
In comparison with other companies in the industry with market capitalizations under AU$263m, the reported median total CEO compensation was AU$353k. In other words, Alligator Energy pays its CEO lower than the industry median. Moreover, Greg Hall also holds AU$151k worth of Alligator Energy stock directly under their own name.
Talking in terms of the industry, salary represented approximately 76% of total compensation out of all the companies we analyzed, while other remuneration made up 24% of the pie. Alligator Energy pays a modest slice of remuneration through salary, as compared to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at Alligator Energy Limited's Growth Numbers
Alligator Energy Limited's earnings per share (EPS) grew 22% per year over the last three years. Its revenue is down 85% over the previous year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 Alligator Energy Limited Been A Good Investment?
With a three year total loss of 16% for the shareholders, Alligator Energy Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
As we touched on above, Alligator Energy Limited is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Importantly though, the company has impressed with its EPS growth over three years. It's tough to criticize CEO compensation when the per-share EPS movement is positive. But shareholders will likely want to hold off on any raise for Greg until investor returns are positive.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 6 warning signs for Alligator Energy (2 shouldn't be ignored!) that you should be aware of before investing here.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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