Does Hannans Limited’s (ASX:HNR) CEO Pay Reflect Performance?
In 2007 Damian Hicks was appointed CEO of Hannans Limited (ASX:HNR). 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. This process should give us an idea about how appropriately the CEO is paid.
See our latest analysis for Hannans
How Does Damian Hicks’s Compensation Compare With Similar Sized Companies?
According to our data, Hannans Limited has a market capitalization of AU$22m, and pays its CEO total annual compensation worth AU$510k. (This number is for the twelve months until 2018). We note that’s an increase of 30% above last year. We think total compensation is more important but we note that the CEO salary is lower, at AU$218k. We took a group of companies with market capitalizations below AU$282m, and calculated the median CEO compensation to be AU$368k.
It would therefore appear that Hannans Limited pays Damian Hicks more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at Hannans has changed over time.
Is Hannans Limited Growing?
Hannans Limited has increased its earnings per share (EPS) by an average of 108% a year, over the last three years It achieved revenue growth of 15% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s a real positive to see this sort of growth in a single year. That suggests a healthy and growing business.
We don’t have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Hannans Limited Been A Good Investment?
Boasting a total shareholder return of 450% over three years, Hannans Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary…
We compared the total CEO remuneration paid by Hannans Limited, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. Even better, returns to shareholders have been plentiful, over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Hannans (free visualization of insider trades).
Or you could feast your eyes on this interactive graph depicting past earnings, cash flow and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
