Is Comet Ridge Limited (ASX:COI) Excessively Paying Its CEO?
Tor McCaul became the CEO of Comet Ridge Limited (ASX:COI) in 2009. 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. This method should give us information to assess how appropriately the company pays the CEO.
Check out our latest analysis for Comet Ridge
How Does Tor McCaul's Compensation Compare With Similar Sized Companies?
Our data indicates that Comet Ridge Limited is worth AU$67m, and total annual CEO compensation was reported as AU$408k for the year to June 2019. We think total compensation is more important but we note that the CEO salary is lower, at AU$380k. We examined a group of similar sized companies, with market capitalizations of below AU$307m. The median CEO total compensation in that group is AU$388k.
So Tor McCaul is paid around the average of the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see, below, how CEO compensation at Comet Ridge has changed over time.
Is Comet Ridge Limited Growing?
On average over the last three years, Comet Ridge Limited has grown earnings per share (EPS) by 14% each year (using a line of best fit). Its revenue is up 135% over last year.
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. Shareholders might be interested in this free visualization of analyst forecasts.
Has Comet Ridge Limited Been A Good Investment?
Given the total loss of 14% over three years, many shareholders in Comet Ridge Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
Tor McCaul is paid around what is normal for the leaders of comparable size companies.
We'd say the company can boast of its EPS growth, but we cannot say the same about the lacklustre shareholder returns (over the last three years). Considering the the positives we don't think the CEO pays is too high, but it's certainly hard to argue it is too low. Shifting gears from CEO pay for a second, we've spotted 6 warning signs for Comet Ridge you should be aware of, and 2 of them are significant.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
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