Alwyn Vorster has been the CEO of BCI Minerals Limited (ASX:BCI) since 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Alwyn Vorster's Compensation Compare With Similar Sized Companies?
Our data indicates that BCI Minerals Limited is worth AU$76m, and total annual CEO compensation is AU$637k. (This number is for the twelve months until June 2019). That's actually a decrease on the year before. While we always look at total compensation first, we note that the salary component is less, at AU$479k. We took a group of companies with market capitalizations below AU$291m, and calculated the median CEO total compensation to be AU$371k.
It would therefore appear that BCI Minerals Limited pays Alwyn Vorster 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. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at BCI Minerals has changed from year to year.
Is BCI Minerals Limited Growing?
On average over the last three years, BCI Minerals Limited has grown earnings per share (EPS) by 110% each year (using a line of best fit). In the last year, its revenue is up 64%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. You might want to check this free visual report on analyst forecasts for future earnings.
Has BCI Minerals Limited Been A Good Investment?
BCI Minerals Limited has served shareholders reasonably well, with a total return of 26% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
We compared the total CEO remuneration paid by BCI Minerals Limited, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. We also note that, over the same time frame, shareholder returns haven't been bad. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn't call the CEO pay problematic. So you may want to check if insiders are buying BCI Minerals shares with their own money (free access).
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.
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