Matthew Greentree became the CEO of Ausgold Limited (ASX:AUC) in 2017. 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. 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.
How Does Matthew Greentree's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Ausgold Limited has a market cap of AU$14m, and reported total annual CEO compensation of AU$313k for the year to June 2019. While we always look at total compensation first, we note that the salary component is less, at AU$192k. We took a group of companies with market capitalizations below AU$307m, and calculated the median CEO total compensation to be AU$383k.
Next, let's break down remuneration compositions to understand how the industry and company compare with each other. On a sector level, around 69% of total compensation represents salary and 31% is other remuneration. Our data reveals that Ausgold allocates salary in line with the wider market.
That means Matthew Greentree receives fairly typical remuneration for the CEO of a company that size. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance. The graphic below shows how CEO compensation at Ausgold has changed from year to year.
Is Ausgold Limited Growing?
Over the last three years Ausgold Limited has seen earnings per share (EPS) move in a positive direction by an average of 66% per year (using a line of best fit). It saw its revenue drop 72% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in 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 Ausgold Limited Been A Good Investment?
With a three year total loss of 46%, Ausgold Limited would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
Matthew Greentree is paid around the same as most CEOs of similar size companies.
We like that the company is growing EPS, but we cannot say the same about the lacklustre shareholder returns (over the last three years). Considering the improvement in earnings per share, one could argue that the CEO pay is appropriate, albeit not too low. Shifting gears from CEO pay for a second, we've spotted 4 warning signs for Ausgold you should be aware of, and 2 of them are significant.
Important note: Ausgold 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.
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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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Thank you for reading.