U.S. Markets closed

Does Traka Resources Limited's (ASX:TKL) CEO Pay Matter?

Simply Wall St

Patrick Verbeek is the CEO of Traka Resources Limited (ASX:TKL). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. 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 Traka Resources

How Does Patrick Verbeek's Compensation Compare With Similar Sized Companies?

According to our data, Traka Resources Limited has a market capitalization of AU$4.4m, and paid its CEO total annual compensation worth AU$321k over the year to June 2019. We note that's an increase of 16% above last year. While we always look at total compensation first, we note that the salary component is less, at AU$277k. We looked at a group of companies with market capitalizations under AU$293m, and the median CEO total compensation was AU$377k.

So Patrick Verbeek receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.

You can see, below, how CEO compensation at Traka Resources has changed over time.

ASX:TKL CEO Compensation, October 19th 2019

Is Traka Resources Limited Growing?

Over the last three years Traka Resources Limited has grown its earnings per share (EPS) by an average of 16% per year (using a line of best fit). It saw its revenue drop 29% over the last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. Revenue growth is a real positive for growth, but ultimately profits are more important. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Traka Resources Limited Been A Good Investment?

Since shareholders would have lost about 48% over three years, some Traka Resources Limited shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Patrick Verbeek is paid around the same as most CEOs of similar size companies.

We like that the company is growing EPS, 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. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Traka Resources (free visualization of insider trades).

If you want to buy a stock that is better than Traka Resources, this free list of high return, low debt companies is a great place to look.

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.

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. Thank you for reading.