In 2016 Tony Schreck was appointed CEO of Metal Bank Limited (ASX:MBK). 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Tony Schreck's Compensation Compare With Similar Sized Companies?
Our data indicates that Metal Bank Limited is worth AU$7.9m, and total annual CEO compensation was reported as AU$252k for the year to June 2019. That's a modest increase of 1.1% on the prior year year. While we always look at total compensation first, we note that the salary component is less, at AU$239k. We took a group of companies with market capitalizations below AU$293m, and calculated the median CEO total compensation to be AU$381k.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.
You can see, below, how CEO compensation at Metal Bank has changed over time.
Is Metal Bank Limited Growing?
On average over the last three years, Metal Bank Limited has grown earnings per share (EPS) by 83% each year (using a line of best fit). It saw its revenue drop 22% over the last year.
This demonstrates that the company has been improving recently. A good result. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. 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 Metal Bank Limited Been A Good Investment?
With a three year total loss of 65%, Metal Bank Limited would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
It looks like Metal Bank Limited pays its CEO less than similar sized companies.
Considering the underlying business is growing earnings, this would suggest the pay is modest. Despite some positives, it is likely that shareholders wanted better returns, given the performance over the last three years. We're not critical of the remuneration Tony Schreck receives, but it would be good to see improved returns to shareholders before the remuneration grows too much. 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 Metal Bank (free visualization of insider trades).
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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.
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