Richard Tacon became the CEO of Bathurst Resources Limited (ASX:BRL) in 2015, 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.
Comparing Bathurst Resources Limited's CEO Compensation With the industry
At the time of writing, our data shows that Bathurst Resources Limited has a market capitalization of AU$67m, and reported total annual CEO compensation of NZ$959k for the year to June 2020. That's a slightly lower by 3.6% over the previous year. In particular, the salary of NZ$736.0k, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the industry with market capitalizations under AU$268m, the reported median total CEO compensation was NZ$328k. Accordingly, our analysis reveals that Bathurst Resources Limited pays Richard Tacon north of the industry median. What's more, Richard Tacon holds AU$608k worth of shares in the company in their own name.
Talking in terms of the industry, salary represented approximately 69% of total compensation out of all the companies we analyzed, while other remuneration made up 31% of the pie. According to our research, Bathurst Resources has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Bathurst Resources Limited's Growth
Over the past three years, Bathurst Resources Limited has seen its earnings per share (EPS) grow by 22% per year. It saw its revenue drop 11% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Bathurst Resources Limited Been A Good Investment?
Given the total shareholder loss of 71% over three years, many shareholders in Bathurst Resources Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
As previously discussed, Richard is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, we must not forget that the EPS growth has been very strong, but it's disappointing to see negative shareholder returns over the same period. Considering overall performance, we can't say Richard is underpaid, in fact compensation is definitely on the higher side.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 3 warning signs (and 1 which shouldn't be ignored) in Bathurst Resources we think you should know about.
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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