Increases to Focus Minerals Limited's (ASX:FML) CEO Compensation Might Cool off for now
CEO Zhaoya Wang has done a decent job of delivering relatively good performance at Focus Minerals Limited (ASX:FML) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 28 May 2021. However, some shareholders may still want to keep CEO compensation within reason.
Check out our latest analysis for Focus Minerals
How Does Total Compensation For Zhaoya Wang Compare With Other Companies In The Industry?
According to our data, Focus Minerals Limited has a market capitalization of AU$53m, and paid its CEO total annual compensation worth AU$513k over the year to December 2020. That's mostly flat as compared to the prior year's compensation. Notably, the salary which is AU$420.0k, represents most of the total compensation being paid.
For comparison, other companies in the industry with market capitalizations below AU$257m, reported a median total CEO compensation of AU$303k. Accordingly, our analysis reveals that Focus Minerals Limited pays Zhaoya Wang north of the industry median.
Component | 2020 | 2019 | Proportion (2020) |
Salary | AU$420k | AU$420k | 82% |
Other | AU$93k | AU$94k | 18% |
Total Compensation | AU$513k | AU$514k | 100% |
Speaking on an industry level, nearly 69% of total compensation represents salary, while the remainder of 31% is other remuneration. According to our research, Focus Minerals has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Focus Minerals Limited's Growth
Focus Minerals Limited's earnings per share (EPS) grew 6.2% per year over the last three years. Its revenue is down 90% over the previous year.
We would prefer it if there was revenue growth, but the modest improvement in EPS is good. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 Focus Minerals Limited Been A Good Investment?
Focus Minerals Limited has generated a total shareholder return of 5.4% over three years, so most shareholders wouldn't be too disappointed. Although, there's always room to improve. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.
In Summary...
Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.
CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 4 warning signs for Focus Minerals (of which 2 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.
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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