Does Nexus Minerals Limited's (ASX:NXM) CEO Salary Reflect Performance?
Andy Tudor became the CEO of Nexus Minerals Limited (ASX:NXM) in 2014. 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. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
View our latest analysis for Nexus Minerals
How Does Andy Tudor's Compensation Compare With Similar Sized Companies?
Our data indicates that Nexus Minerals Limited is worth AU$5.4m, and total annual CEO compensation was reported as AU$300k for the year to June 2019. We think total compensation is more important but we note that the CEO salary is lower, at AU$251k. We looked at a group of companies with market capitalizations under AU$312m, and the median CEO total compensation was AU$389k.
Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Nexus Minerals. On a sector level, around 69% of total compensation represents salary and 31% is other remuneration. So it seems like there isn't a significant difference between Nexus Minerals and the broader market, in terms of salary allocation in the overall compensation package.
So Andy Tudor receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance. You can see a visual representation of the CEO compensation at Nexus Minerals, below.
Is Nexus Minerals Limited Growing?
Nexus Minerals Limited has seen earnings per share (EPS) move positively by an average of 13% a year, over the last three years (using a line of best fit). In the last year, its revenue is down 19%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. 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 shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Nexus Minerals Limited Been A Good Investment?
With a three year total loss of 38%, Nexus Minerals Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
Remuneration for Andy Tudor is close enough to the median pay for a CEO of a similar sized company .
We'd say the company can boast of its EPS growth, but we cannot say the same about the lacklustre shareholder returns (over the last three years). Considering the improvement in earnings per share, one could argue that the CEO pay is appropriate, albeit not too low. Shifting gears from CEO pay for a second, we've spotted 4 warning signs for Nexus Minerals you should be aware of, and 3 of them can't be ignored.
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 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.
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. Thank you for reading.
