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Is Inca Minerals Limited (ASX:ICG) Overpaying Its CEO?

Simply Wall St

In 2012 Ross Brown was appointed CEO of Inca Minerals Limited (ASX:ICG). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Inca Minerals

How Does Ross Brown's Compensation Compare With Similar Sized Companies?

Our data indicates that Inca Minerals Limited is worth AU$9.4m, and total annual CEO compensation was reported as AU$318k for the year to June 2019. That's a notable increase of 20% on last year. We think total compensation is more important but we note that the CEO salary is lower, at AU$256k. We looked at a group of companies with market capitalizations under AU$299m, and the median CEO total compensation was AU$377k.

So Ross Brown is paid around the average of the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

You can see, below, how CEO compensation at Inca Minerals has changed over time.

ASX:ICG CEO Compensation, October 2nd 2019

Is Inca Minerals Limited Growing?

Inca Minerals Limited has increased its earnings per share (EPS) by an average of 113% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 233%.

This shows that the company has improved itself over the last few years. Good news for shareholders. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. 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 Inca Minerals Limited Been A Good Investment?

Since shareholders would have lost about 75% over three years, some Inca Minerals Limited shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

Ross Brown is paid around the same as most CEOs of similar size companies.

We like that the company is growing EPS, but we find the returns over the last three years to be lacking. Considering the improvement in earnings per share, one could argue that the CEO pay is appropriate, albeit not too low. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Inca Minerals.

Important note: Inca Minerals may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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.