Matthew Greentree has been the CEO of Ausgold Limited (ASX:AUC) since 2017, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
How Does Total Compensation For Matthew Greentree Compare With Other Companies In The Industry?
According to our data, Ausgold Limited has a market capitalization of AU$75m, and paid its CEO total annual compensation worth AU$306k over the year to June 2020. This means that the compensation hasn't changed much from last year. Notably, the salary which is AU$192.4k, represents most of the total compensation being paid.
For comparison, other companies in the industry with market capitalizations below AU$276m, reported a median total CEO compensation of AU$311k. From this we gather that Matthew Greentree is paid around the median for CEOs in the industry. What's more, Matthew Greentree holds AU$203k worth of shares in the company in their own name.
Speaking on an industry level, nearly 70% of total compensation represents salary, while the remainder of 30% is other remuneration. Although there is a difference in how total compensation is set, Ausgold more or less reflects the market in terms of setting the salary. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
Ausgold Limited's Growth
Ausgold Limited's earnings per share (EPS) grew 46% per year over the last three years. In the last year, its revenue is down 86%.
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 Ausgold Limited Been A Good Investment?
We think that the total shareholder return of 71%, over three years, would leave most Ausgold Limited shareholders smiling. 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, Ausgold Limited is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Investors would surely be happy to see that returns have been great, and that EPS is up. So one could argue that CEO compensation is quite modest, if you consider company performance! In fact, shareholders might even think the CEO deserves a raise as a reward due to the fantastic returns generated.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 4 warning signs (and 2 which are a bit concerning) in Ausgold we think you should know about.
Switching gears from Ausgold, 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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