Yahoo Finance Our View On Emerald Resources' (ASX:EMR) CEO Pay
Morgan Hart has been the CEO of Emerald Resources NL (ASX:EMR) since 2014, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Emerald Resources.
See our latest analysis for Emerald Resources
Comparing Emerald Resources NL's CEO Compensation With the industry
At the time of writing, our data shows that Emerald Resources NL has a market capitalization of AU$327m, and reported total annual CEO compensation of AU$323k for the year to June 2020. That's a notable increase of 95% on last year. Notably, the salary which is AU$295.0k, represents most of the total compensation being paid.
On comparing similar companies from the same industry with market caps ranging from AU$138m to AU$550m, we found that the median CEO total compensation was AU$659k. In other words, Emerald Resources pays its CEO lower than the industry median. Moreover, Morgan Hart also holds AU$25m worth of Emerald Resources stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2020 | 2019 | Proportion (2020) |
Salary | AU$295k | AU$151k | 91% |
Other | AU$28k | AU$14k | 9% |
Total Compensation | AU$323k | AU$165k | 100% |
Talking in terms of the industry, salary represented approximately 70% of total compensation out of all the companies we analyzed, while other remuneration made up 30% of the pie. Emerald Resources pays out 91% of remuneration in the form of a salary, significantly higher than the industry average. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Emerald Resources NL's Growth
Over the past three years, Emerald Resources NL has seen its earnings per share (EPS) grow by 30% per year. It saw its revenue drop 3.8% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 Emerald Resources NL Been A Good Investment?
Emerald Resources NL has generated a total shareholder return of 32% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
In Summary...
As we noted earlier, Emerald Resources pays its CEO lower than the norm for similar-sized companies belonging to the same industry. But over the last three years, EPS growth has been growing rapidly, which is a great sign for the company. Unfortunately, although shareholder returns are growing, they haven't impressed us as much in comparison, over the same period. Shareholder returns could be better but we're pleased with the positive EPS growth. So it's fair to say Morgan has done quite well despite modest compensation and shareholders might not be averse to a raise.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 3 warning signs for Emerald Resources that you should be aware of before investing.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
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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