Archie Koimtsidis became the CEO of Cardinal Resources Limited (ASX:CDV) in 2012. 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 we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Archie Koimtsidis's Compensation Compare With Similar Sized Companies?
Our data indicates that Cardinal Resources Limited is worth AU$183m, and total annual CEO compensation was reported as AU$621k for the year to June 2019. We think total compensation is more important but we note that the CEO salary is lower, at AU$300k. We examined a group of similar sized companies, with market capitalizations of below AU$300m. The median CEO total compensation in that group is AU$380k.
Thus we can conclude that Archie Koimtsidis receives more in total compensation than the median of a group of companies in the same market, and of similar size to Cardinal Resources Limited. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at Cardinal Resources has changed from year to year.
Is Cardinal Resources Limited Growing?
Cardinal Resources Limited saw earnings per share stay pretty flat over the last three years, albeit with a slight decrease, according to the line of best fit. Its revenue is up 185% over last year.
The reduction in earnings per share, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. 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. It could be important to check this free visual depiction of what analysts expect for the future.
Has Cardinal Resources Limited Been A Good Investment?
Cardinal Resources Limited has generated a total shareholder return of 2.8% over three years, so most shareholders wouldn't be too disappointed. But they would probably prefer not to see CEO compensation far in excess of the median.
We examined the amount Cardinal Resources Limited pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
We generally prefer to see stronger EPS growth, and we're not particularly impressed with the total shareholder return, over the last three years. In conclusion we think the company should definitely focus on improving the business before awarding any large pay rises. Whatever your view on compensation, you might want to check if insiders are buying or selling Cardinal Resources shares (free trial).
Important note: Cardinal Resources 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.
If you spot an error that warrants correction, please contact the editor at email@example.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.
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