Eddie Pang has been the CEO of Genesis Resources Limited (ASX:GES) since 2015, 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 Genesis Resources.
Comparing Genesis Resources Limited's CEO Compensation With the industry
Our data indicates that Genesis Resources Limited has a market capitalization of AU$20m, and total annual CEO compensation was reported as AU$197k for the year to June 2020. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at AU$180.0k constitutes the majority of total compensation received by the CEO.
In comparison with other companies in the industry with market capitalizations under AU$283m, the reported median total CEO compensation was AU$304k. This suggests that Eddie Pang is paid below the industry median. Moreover, Eddie Pang also holds AU$80k worth of Genesis Resources stock directly under their own name.
On an industry level, around 69% of total compensation represents salary and 31% is other remuneration. Genesis Resources pays out 91% of remuneration in the form of a salary, significantly higher than the industry average. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at Genesis Resources Limited's Growth Numbers
Over the past three years, Genesis Resources Limited has seen its earnings per share (EPS) grow by 32% per year. Its revenue is down 72% over the previous year.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 Genesis Resources Limited Been A Good Investment?
Given the total shareholder loss of 17% over three years, many shareholders in Genesis Resources Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
As previously discussed, Eddie is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, the EPS growth over three years is certainly impressive. It's tough to criticize CEO compensation when the per-share EPS movement is positive. But we believe shareholders would want to see healthier returns before the CEO gets a raise.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 5 warning signs for Genesis Resources (3 don't sit too well with us!) that you should be aware of before investing here.
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.
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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