Sandeep Biswas became the CEO of Newcrest Mining Limited (ASX:NCM) in 2014. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Sandeep Biswas's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Newcrest Mining Limited has a market cap of AU$23b, and reported total annual CEO compensation of US$6.3m for the year to June 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.7m. We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. We took a group of companies with market capitalizations over US$8.0b, and calculated the median CEO total compensation to be US$3.9m. Once you start looking at very large companies, you need to take a broader range, because there simply aren't that many of them.
Thus we can conclude that Sandeep Biswas receives more in total compensation than the median of a group of large companies in the same market as Newcrest Mining Limited. However, this doesn't necessarily mean the pay 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 Newcrest Mining has changed over time.
Is Newcrest Mining Limited Growing?
Newcrest Mining Limited has increased its earnings per share (EPS) by an average of 4.8% a year, over the last three years (using a line of best fit). Its revenue is up 5.1% over last year.
I would argue that the improvement in revenue isn't particularly impressive, but the modest improvement in EPS is good. So there are some positives here, but not enough to earn high praise. Shareholders might be interested in this free visualization of analyst forecasts.
Has Newcrest Mining Limited Been A Good Investment?
Boasting a total shareholder return of 50% over three years, Newcrest Mining Limited has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
We compared total CEO remuneration at Newcrest Mining Limited with the amount paid at other large companies. Our data suggests that it pays above the median CEO pay within that group.
Over the last three years returns to investors have been great, though we might have liked stronger business growth. So, considering these tasty returns, the CEO compensation may be quite appropriate. Shareholders may want to check for free if Newcrest Mining insiders are buying or selling shares.
If you want to buy a stock that is better than Newcrest Mining, this free list of high return, low debt companies is a great place to look.
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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