Yahoo Finance How Much Did Middle Island Resources Limited's (ASX:MDI) CEO Pocket Last Year?
Rick Yeates became the CEO of Middle Island Resources Limited (ASX:MDI) in 2010. 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 - 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.
Check out our latest analysis for Middle Island Resources
How Does Rick Yeates's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Middle Island Resources Limited has a market cap of AU$18m, and reported total annual CEO compensation of AU$260k for the year to June 2019. We think total compensation is more important but we note that the CEO salary is lower, at AU$210k. We took a group of companies with market capitalizations below AU$313m, and calculated the median CEO total compensation to be AU$389k.
Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Middle Island Resources. Talking in terms of the sector, salary represented approximately 69% of total compensation out of all the companies we analysed, while other remuneration made up 31% of the pie. So it seems like there isn't a significant difference between Middle Island Resources and the broader market, in terms of salary allocation in the overall compensation package.
At first glance this seems like a real positive for shareholders, since Rick Yeates is paid less than the average total compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance. You can see, below, how CEO compensation at Middle Island Resources has changed over time.
Is Middle Island Resources Limited Growing?
On average over the last three years, Middle Island Resources Limited has seen earnings per share (EPS) move in a favourable direction by 54% each year (using a line of best fit). It saw its revenue drop 77% over the 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. 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 Middle Island Resources Limited Been A Good Investment?
With a three year total loss of 51%, Middle Island Resources Limited would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
Middle Island Resources 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. Few would deny that the total shareholder return over the last three years could have been a lot better. We're not critical of the remuneration Rick Yeates receives, but it would be good to see improved returns to shareholders before the remuneration grows too much. This sort of circumstance certainly justifies further research, because the investment returns might still come in the future. On another note, Middle Island Resources has 6 warning signs (and 2 which are concerning) we think you should know about.
Important note: Middle Island Resources may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
