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Does Prairie Mining Limited’s (ASX:PDZ) CEO Pay Compare Well With Peers?

Luis Baughman

Ben Stoikovich became the CEO of Prairie Mining Limited (ASX:PDZ) in 2013. 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.

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How Does Ben Stoikovich’s Compensation Compare With Similar Sized Companies?

According to our data, Prairie Mining Limited has a market capitalization of AU$89m, and pays its CEO total annual compensation worth AU$646k. (This figure is for the year to 2018). While we always look at total compensation first, we note that the salary component is less, at AU$436k. We examined a group of similar sized companies, with market capitalizations of below AU$281m. The median CEO compensation in that group is AU$367k.

It would therefore appear that Prairie Mining Limited pays Ben Stoikovich more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

The graphic below shows how CEO compensation at Prairie Mining has changed from year to year.

ASX:PDZ CEO Compensation January 18th 19

Is Prairie Mining Limited Growing?

Over the last three years Prairie Mining Limited has shrunk its earnings per share by an average of 24% per year. Its revenue is down -38% over last year.

Sadly for shareholders, earnings per share are actually down, over three years. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO.

We don’t have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Prairie Mining Limited Been A Good Investment?

Most shareholders would probably be pleased with Prairie Mining Limited for providing a total return of 129% over three years. 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.

In Summary…

We compared the total CEO remuneration paid by Prairie Mining Limited, and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.

On the other hand, returns have been good, so the company is doing something right. So on this analysis we’d stop short of criticizing the level of CEO compensation. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Prairie Mining.

Or you might prefer gaze upon this detailed graph of past earnings, revenue and cash flow .

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.