In 2007 Michael Fowler was appointed CEO of Genesis Minerals Limited (ASX:GMD). 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 process should give us an idea about how appropriately the CEO is paid.
How Does Michael Fowler's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Genesis Minerals Limited has a market cap of AU$47m, and reported total annual CEO compensation of AU$314k for the year to June 2019. While we always look at total compensation first, we note that the salary component is less, at AU$248k. We examined a group of similar sized companies, with market capitalizations of below AU$289m. The median CEO total compensation in that group is AU$382k.
That means Michael Fowler receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
You can see, below, how CEO compensation at Genesis Minerals has changed over time.
Is Genesis Minerals Limited Growing?
Genesis Minerals Limited has reduced its earnings per share by an average of 39% a year, over the last three years (measured with a line of best fit). Its revenue is up 16% over last year.
Unfortunately, earnings per share have trended lower over the last three years. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Genesis Minerals Limited Been A Good Investment?
Most shareholders would probably be pleased with Genesis Minerals Limited for providing a total return of 49% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
Remuneration for Michael Fowler is close enough to the median pay for a CEO of a similar sized company .
We feel that earnings per share have been a bit disappointing, but it's nice to see positive shareholder returns over the last three years. So we think most shareholders wouldn't be too worried about CEO compensation, which is close to the median for similar sized companies. So you may want to check if insiders are buying Genesis Minerals shares with their own money (free access).
Important note: Genesis Minerals 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 firstname.lastname@example.org. 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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