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Is Azure Minerals Limited (ASX:AZS) Excessively Paying Its CEO?

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Simply Wall St
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Tony Rovira has been the CEO of Azure Minerals Limited (ASX:AZS) since 2003. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Azure Minerals

How Does Tony Rovira's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Azure Minerals Limited has a market cap of AU$23m, and reported total annual CEO compensation of AU$493k for the year to June 2019. That's actually a decrease on the year before. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$417k. We looked at a group of companies with market capitalizations under AU$292m, and the median CEO total compensation was AU$378k.

It would therefore appear that Azure Minerals Limited pays Tony Rovira more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see a visual representation of the CEO compensation at Azure Minerals, below.

ASX:AZS CEO Compensation, November 12th 2019
ASX:AZS CEO Compensation, November 12th 2019

Is Azure Minerals Limited Growing?

On average over the last three years, Azure Minerals Limited has grown earnings per share (EPS) by 7.8% each year (using a line of best fit). Its revenue is down 60% over last year.

I would argue that the lack of revenue growth in the last year is less than ideal, but I'm happy with the EPS growth. It's hard to reach a conclusion about business performance right now. This may be one to watch. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Azure Minerals Limited Been A Good Investment?

Given the total loss of 75% over three years, many shareholders in Azure Minerals Limited are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We compared the total CEO remuneration paid by Azure Minerals Limited, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

Over the last three years, shareholder returns have been downright disappointing, and the underlying business has failed to impress us. Shareholders may wish to consider further research. Although we don't think the CEO pay is too high, it is probably more on the generous side of things. So you may want to check if insiders are buying Azure Minerals shares with their own money (free access).

Important note: Azure Minerals 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.