Clive Jones is the CEO of Cazaly Resources Limited (ASX:CAZ). 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. 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 Clive Jones's Compensation Compare With Similar Sized Companies?
Our data indicates that Cazaly Resources Limited is worth AU$8.0m, and total annual CEO compensation was reported as AU$194k for the year to June 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$180k. We looked at a group of companies with market capitalizations under AU$290m, and the median CEO total compensation was AU$378k.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. Though positive, it's important we delve into the performance of the actual business.
The graphic below shows how CEO compensation at Cazaly Resources has changed from year to year.
Is Cazaly Resources Limited Growing?
On average over the last three years, Cazaly Resources Limited has grown earnings per share (EPS) by 17% each year (using a line of best fit). It achieved revenue growth of 180% over the 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. 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 Cazaly Resources Limited Been A Good Investment?
Since shareholders would have lost about 27% over three years, some Cazaly Resources Limited shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.
It appears that Cazaly Resources Limited remunerates its CEO below most similar sized companies.
Since the business is growing, many would argue this suggests the pay is modest. Despite some positives, it is likely that shareholders wanted better returns, given the performance over the last three years. So while we don't think, Clive Jones is paid too much, shareholders may hope that business performance translates to investment returns before pay rises are given out. 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. Whatever your view on compensation, you might want to check if insiders are buying or selling Cazaly Resources shares (free trial).
If you want to buy a stock that is better than Cazaly Resources, this free list of high return, low debt companies is a great place to look.
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