Bruce McCracken has been the CEO of BMG Resources Limited (ASX:BMG) since 2011. 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 Bruce McCracken's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that BMG Resources Limited has a market cap of AU$2.3m, and reported total annual CEO compensation of AU$253k for the year to June 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$150k. We examined a group of similar sized companies, with market capitalizations of below AU$296m. The median CEO total compensation in that group is AU$385k.
Most shareholders would consider it a positive that Bruce McCracken takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. 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 BMG Resources, below.
Is BMG Resources Limited Growing?
On average over the last three years, BMG Resources Limited has grown earnings per share (EPS) by 102% each year (using a line of best fit). In the last year, its revenue is up 90%.
This demonstrates that the company has been improving recently. A good result. 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 BMG Resources Limited Been A Good Investment?
Given the total loss of 60% over three years, many shareholders in BMG Resources Limited are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
BMG Resources Limited is currently paying its CEO below what is normal for companies of its size.
Since the business is growing, many would argue this suggests the pay is modest. Unfortunately, some shareholders may be disappointed with their returns, given the company's performance over the last three years. So while we would not say that Bruce McCracken is generously paid, it would be good to see an improvement in business performance before too an increase in pay. 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. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling BMG Resources (free visualization of insider trades).
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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