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Morgan Hart became the CEO of Emerald Resources NL (ASX:EMR) in 2014. 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. This method should give us information to assess how appropriately the company pays the CEO.
How Does Morgan Hart's Compensation Compare With Similar Sized Companies?
According to our data, Emerald Resources NL has a market capitalization of AU$125m, and paid its CEO total annual compensation worth AU$165k over the year to June 2019. Notably, that's an increase of 214% over the year before. While we always look at total compensation first, we note that the salary component is less, at AU$151k. We examined a group of similar sized companies, with market capitalizations of below AU$292m. The median CEO total compensation in that group is AU$380k.
A first glance this seems like a real positive for shareholders, since Morgan Hart 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.
You can see a visual representation of the CEO compensation at Emerald Resources, below.
Is Emerald Resources NL Growing?
Over the last three years Emerald Resources NL has shrunk its earnings per share by an average of 10% per year (measured with a line of best fit). In the last year, its revenue is up 194%.
Investors should note that, over three years, earnings per share are down. But in contrast the revenue growth is strong, suggesting future potential for earnings growth. 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. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Emerald Resources NL Been A Good Investment?
Given the total loss of 16% over three years, many shareholders in Emerald Resources NL are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
It appears that Emerald Resources NL remunerates its CEO below most similar sized companies.
Morgan Hart is paid less than CEOs of similar size companies, but growth hasn't been particularly impressive and the total shareholder return over three years would leave many disappointed. Many shareholders would probably like to see improvements, but our analysis does not suggest that CEO compensation is too generous. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Emerald Resources.
Important note: Emerald 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.
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 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. Thank you for reading.