Ian Levy became the CEO of Australian Bauxite Limited (ASX:ABX) in 2009. First, this article will compare CEO compensation with compensation at similar sized companies. 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. This method should give us information to assess how appropriately the company pays the CEO.
How Does Ian Levy's Compensation Compare With Similar Sized Companies?
Our data indicates that Australian Bauxite Limited is worth AU$12m, and total annual CEO compensation was reported as AU$450k for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at AU$250k. We took a group of companies with market capitalizations below AU$309m, and calculated the median CEO total compensation to be AU$385k.
Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Australian Bauxite. Talking in terms of the sector, salary represented approximately 69% of total compensation out of all the companies we analysed, while other remuneration made up 31% of the pie. Australian Bauxite is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation
That means Ian Levy 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 Australian Bauxite has changed from year to year.
Is Australian Bauxite Limited Growing?
Australian Bauxite Limited has reduced its earnings per share by an average of 59% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 1127% over the last year.
As investors, we are a bit wary of companies that have lower earnings per share, over three years. But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. Although we don't have analyst forecasts you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Australian Bauxite Limited Been A Good Investment?
With a three year total loss of 27%, Australian Bauxite Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
Ian Levy is paid around the same as most CEOs of similar size companies.
The company cannot boast particularly strong per share growth. And we think the shareholder returns - over three years - have been underwhelming. So it would take a bold person to suggest the pay is too modest. CEO compensation is an important area to keep your eyes on, but we've also identified 6 warning signs for Australian Bauxite (3 are significant!) that you should be aware of before investing here.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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