In 2016 Jon Price was appointed CEO of Intermin Resources Ltd (ASX:IRC). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. 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.
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How Does Jon Price's Compensation Compare With Similar Sized Companies?
Our data indicates that Intermin Resources Ltd is worth AU$25m, and total annual CEO compensation is AU$479k. (This is based on the year to June 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$295k. We took a group of companies with market capitalizations below AU$289m, and calculated the median CEO total compensation to be AU$355k.
As you can see, Jon Price is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Intermin Resources Ltd is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see a visual representation of the CEO compensation at Intermin Resources, below.
Is Intermin Resources Ltd Growing?
Over the last three years Intermin Resources Ltd has grown its earnings per share (EPS) by an average of 85% per year (using a line of best fit). Its revenue is down -16% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. While it would be good to see revenue growth, profits matter more in the end. Although we don't have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Intermin Resources Ltd Been A Good Investment?
Since shareholders would have lost about 4.5% over three years, some Intermin Resources Ltd shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.
We examined the amount Intermin Resources Ltd pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
However we must not forget that the EPS growth has been very strong over three years. On the other hand returns to investors over the same period have probably disappointed many. Considering the per share profit growth, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. Shareholders may want to check for free if Intermin Resources insiders are buying or selling shares.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Thank you for reading.