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Is Silver Mines Limited (ASX:SVL) Excessively Paying Its CEO?

Bruce Howe

In 2016 Anthony McClure was appointed CEO of Silver Mines Limited (ASX:SVL). 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. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for Silver Mines

How Does Anthony McClure’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Silver Mines Limited has a market cap of AU$27m, and is paying total annual CEO compensation of AU$450k. (This is based on the year to 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at AU$411k. We looked at a group of companies with market capitalizations under AU$282m, and the median CEO compensation was AU$368k.

So Anthony McClure receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn’t tell us a great deal, it becomes more relevant when considered against the business performance.

The graphic below shows how CEO compensation at Silver Mines has changed from year to year.

ASX:SVL CEO Compensation December 27th 18

Is Silver Mines Limited Growing?

Silver Mines Limited has increased its earnings per share (EPS) by an average of 103% a year, over the last three years In the last year, its revenue is up 97%.

This shows that the company has improved itself over the last few years. Good news for shareholders. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see.

Although we don’t have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Silver Mines Limited Been A Good Investment?

With a three year total loss of 56%, Silver Mines Limited would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary…

Remuneration for Anthony McClure is close enough to the median pay for a CEO of a similar sized company .

We think that the EPS growth is very pleasing, but we find the returns over the last three years to be lacking. Considering the improvement in earnings per share, one could argue that the CEO pay is appropriate, albeit not too low. Whatever your view on compensation, you might want to check if insiders are buying or selling Silver Mines shares (free trial).

Or you might prefer this data-rich interactive visualization of historic revenue and earnings.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.