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Is Crater Gold Mining Limited (ASX:CGN) Excessively Paying Its CEO?

Simply Wall St

Russ Parker has been the CEO of Crater Gold Mining Limited (ASX:CGN) since 2015. First, this article will compare CEO compensation with compensation at similar sized companies. 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.

View our latest analysis for Crater Gold Mining

How Does Russ Parker's Compensation Compare With Similar Sized Companies?

Our data indicates that Crater Gold Mining Limited is worth AU$20m, and total annual CEO compensation was reported as AU$183k for the year to June 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$162k. We took a group of companies with market capitalizations below AU$299m, and calculated the median CEO total compensation to be AU$377k.

A first glance this seems like a real positive for shareholders, since Russ Parker is paid less than the average total compensation paid by similar sized companies. Though positive, it's important we delve into the performance of the actual business.

The graphic below shows how CEO compensation at Crater Gold Mining has changed from year to year.

ASX:CGN CEO Compensation, October 2nd 2019

Is Crater Gold Mining Limited Growing?

On average over the last three years, Crater Gold Mining Limited has grown earnings per share (EPS) by 45% each year (using a line of best fit). In the last year, its revenue is up 704%.

This shows that the company has improved itself over the last few years. Good news for shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Crater Gold Mining Limited Been A Good Investment?

Since shareholders would have lost about 66% over three years, some Crater Gold Mining Limited shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Crater Gold Mining Limited is currently paying its CEO below what is normal for companies of its size.

Many would consider this to indicate that the pay is modest since the business is growing. Despite some positives, it is likely that shareholders wanted better returns, given the performance over the last three years. We're not critical of the remuneration Russ Parker receives, but it would be good to see improved returns to shareholders before the remuneration grows too much. When I see fairly low remuneration, combined with earnings per share growth, but without big share price gains, it makes me want to research the potential for future gains. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Crater Gold Mining.

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.

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.