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Does IronRidge Resources Limited's (LON:IRR) CEO Pay Matter?

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The CEO of IronRidge Resources Limited (LON:IRR) is Vince Mascolo. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for IronRidge Resources

How Does Vince Mascolo's Compensation Compare With Similar Sized Companies?

According to our data, IronRidge Resources Limited has a market capitalization of UK£53m, and pays its CEO total annual compensation worth AU$1.7m. (This is based on the year to June 2018). While we always look at total compensation first, we note that the salary component is less, at AU$350k. We looked at a group of companies with market capitalizations under AU$286m, and the median CEO total compensation was AU$443k.

As you can see, Vince Mascolo is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean IronRidge Resources Limited 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 IronRidge Resources, below.

AIM:IRR CEO Compensation, May 3rd 2019
AIM:IRR CEO Compensation, May 3rd 2019

Is IronRidge Resources Limited Growing?

Over the last three years IronRidge Resources Limited has shrunk its earnings per share by an average of 54% per year (measured with a line of best fit). It achieved revenue growth of 2317% over the last year.

The reduction in earnings per share, over three years, is arguably concerning. On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has IronRidge Resources Limited Been A Good Investment?

Boasting a total shareholder return of 339% over three years, IronRidge Resources 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 IronRidge Resources Limited, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

While we generally prefer to see stronger EPS growth, there's no arguing with the strong returns to shareholders, over the last three years. So, considering these tasty returns, the CEO compensation may be quite appropriate. So you may want to check if insiders are buying IronRidge Resources shares with their own money (free access).

Important note: IronRidge Resources 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.

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 editorial-team@simplywallst.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.