Yahoo Finance We Think Some Shareholders May Hesitate To Increase Orion Minerals Limited's (ASX:ORN) CEO Compensation
Key Insights
Orion Minerals' Annual General Meeting to take place on 28th of November
Total pay for CEO Errol Smart includes AU$322.0k salary
Total compensation is similar to the industry average
Orion Minerals' three-year loss to shareholders was 52% while its EPS grew by 21% over the past three years
Shareholders of Orion Minerals Limited (ASX:ORN) will have been dismayed by the negative share price return over the last three years. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. The AGM coming up on the 28th of November could be an opportunity for shareholders to bring these concerns to the board's attention. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.
See our latest analysis for Orion Minerals
Comparing Orion Minerals Limited's CEO Compensation With The Industry
According to our data, Orion Minerals Limited has a market capitalization of AU$81m, and paid its CEO total annual compensation worth AU$405k over the year to June 2023. We note that's a small decrease of 4.4% on last year. Notably, the salary which is AU$322.0k, represents most of the total compensation being paid.
For comparison, other companies in the Australian Metals and Mining industry with market capitalizations below AU$305m, reported a median total CEO compensation of AU$387k. So it looks like Orion Minerals compensates Errol Smart in line with the median for the industry. Moreover, Errol Smart also holds AU$384k worth of Orion Minerals stock directly under their own name.
Component | 2023 | 2022 | Proportion (2023) |
Salary | AU$322k | AU$322k | 79% |
Other | AU$83k | AU$102k | 21% |
Total Compensation | AU$405k | AU$424k | 100% |
On an industry level, roughly 61% of total compensation represents salary and 39% is other remuneration. It's interesting to note that Orion Minerals pays out a greater portion of remuneration through salary, compared to the industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
Orion Minerals Limited's Growth
Over the past three years, Orion Minerals Limited has seen its earnings per share (EPS) grow by 21% per year. In the last year, its revenue is up 29%.
Shareholders would be glad to know that the company has improved itself over the last few years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing 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 Orion Minerals Limited Been A Good Investment?
The return of -52% over three years would not have pleased Orion Minerals Limited shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would be keen to know what's holding the stock back when earnings have grown. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 6 warning signs for Orion Minerals (3 make us uncomfortable!) that you should be aware of before investing here.
Important note: Orion Minerals is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.