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In 2006 Mark Wilson was appointed CEO of Legend Mining Limited (ASX:LEG). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we’ll consider growth that the business demonstrates. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Mark Wilson’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Legend Mining Limited has a market cap of AU$59m, and is paying total annual CEO compensation of AU$368k. (This figure is for the year to 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at AU$332k. We took a group of companies with market capitalizations below AU$282m, and calculated the median CEO compensation to be AU$363k.
So Mark Wilson receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.
You can see, below, how CEO compensation at Legend Mining has changed over time.
Is Legend Mining Limited Growing?
Over the last three years Legend Mining Limited has grown its earnings per share (EPS) by an average of 8.2% per year (using a line of best fit). Its revenue is down -88% over last year.
I generally like to see a little revenue growth, but I’m happy with the EPS growth. These two metric are moving in different directions, so while it’s hard to be confident judging performance, we think the stock is worth watching. Although we don’t have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Legend Mining Limited Been A Good Investment?
Boasting a total shareholder return of 222% over three years, Legend Mining Limited has done well by shareholders. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.
Mark Wilson is paid around the same as most CEOs of similar size companies.
The company isn’t showing particularly great growth, but shareholder returns have been pleasing. So all things considered I’d venture that the CEO pay is appropriate. So you may want to check if insiders are buying Legend Mining shares with their own money (free access).
Important note: Legend Mining 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.
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 email@example.com.