Mark Kerr has been the CEO of Hawthorn Resources Limited (ASX:HAW) since 2016. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Mark Kerr's Compensation Compare With Similar Sized Companies?
Our data indicates that Hawthorn Resources Limited is worth AU$30m, and total annual CEO compensation was reported as AU$149k for the year to June 2019. Notably, the salary of AU$147k is the vast majority of the CEO compensation. We took a group of companies with market capitalizations below AU$330m, and calculated the median CEO total compensation to be AU$395k.
Next, let's break down remuneration compositions to understand how the industry and company compare with each other. Talking in terms of the sector, salary represented approximately 68% of total compensation out of all the companies we analysed, while other remuneration made up 32% of the pie. Hawthorn Resources pays a high salary, concentrating more on this aspect of compensation in comparison to non-salary pay.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion. You can see, below, how CEO compensation at Hawthorn Resources has changed over time.
Is Hawthorn Resources Limited Growing?
Hawthorn Resources Limited has seen earnings per share (EPS) move positively by an average of 101% a year, over the last three years (using a line of best fit). Its revenue is up 40% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Although we don't have analyst forecasts you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Hawthorn Resources Limited Been A Good Investment?
Most shareholders would probably be pleased with Hawthorn Resources Limited for providing a total return of 223% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
Hawthorn Resources Limited is currently paying its CEO below what is normal for companies of its size.
Since the business is growing, many would argue this suggests the pay is modest. The pleasing shareholder returns are the cherry on top; you might even consider that Mark Kerr deserves a raise! It's not often we see shareholders do so well, and yet the CEO is paid modestly. The cherry on top would be if company insiders are buying shares with their own money. Shifting gears from CEO pay for a second, we've spotted 3 warning signs for Hawthorn Resources you should be aware of, and 1 of them can't be ignored.
If you want to buy a stock that is better than Hawthorn Resources, this free list of high return, low debt companies is a great place to look.
If you spot an error that warrants correction, please contact the editor at email@example.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.
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