Errol Smart has been the CEO of Orion Minerals Limited (ASX:ORN) since 2012, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Orion Minerals.
Comparing Orion Minerals Limited's CEO Compensation With the industry
At the time of writing, our data shows that Orion Minerals Limited has a market capitalization of AU$97m, and reported total annual CEO compensation of AU$575k for the year to June 2020. Notably, that's an increase of 16% over the year before. Notably, the salary which is AU$292.7k, represents most of the total compensation being paid.
For comparison, other companies in the industry with market capitalizations below AU$279m, reported a median total CEO compensation of AU$304k. This suggests that Errol Smart is paid more than the median for the industry. What's more, Errol Smart holds AU$597k worth of shares in the company in their own name.
On an industry level, roughly 68% of total compensation represents salary and 32% is other remuneration. Orion Minerals sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Orion Minerals Limited's Growth
Orion Minerals Limited has seen its earnings per share (EPS) increase by 33% a year over the past three years. Its revenue is up 13% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Orion Minerals Limited Been A Good Investment?
Most shareholders would probably be pleased with Orion Minerals Limited for providing a total return of 50% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
As we touched on above, Orion Minerals Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But EPS growth and shareholder returns have been top-notch for the past three years. As a result of the excellent all-round performance of the company, we believe CEO compensation is fair. The pleasing shareholder returns are the cherry on top. We wouldn't be wrong in saying that shareholders feel that Errol's performance creates value for the company.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 5 warning signs (and 2 which are a bit concerning) in Orion Minerals we think you should know about.
Switching gears from Orion Minerals, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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