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How Should Investors Feel About Dark Horse Resources Limited's (ASX:DHR) CEO Pay?

Simply Wall St

David Mason has been the CEO of Dark Horse Resources Limited (ASX:DHR) since 2016. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Dark Horse Resources

How Does David Mason's Compensation Compare With Similar Sized Companies?

According to our data, Dark Horse Resources Limited has a market capitalization of AU$8.3m, and paid its CEO total annual compensation worth AU$300k over the year to June 2019. Notably, the salary of AU$300k is the vast majority of the CEO compensation. We looked at a group of companies with market capitalizations under AU$286m, and the median CEO total compensation was AU$381k.

So David Mason receives a similar amount to the median CEO pay, amongst 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 a visual representation of the CEO compensation at Dark Horse Resources, below.

ASX:DHR CEO Compensation, January 4th 2020

Is Dark Horse Resources Limited Growing?

Dark Horse Resources Limited has reduced its earnings per share by an average of 6.9% a year, over the last three years (measured with a line of best fit). It has seen most of its revenue evaporate over the past year.

Few shareholders would be pleased to read that earnings per share are lower over three years. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Dark Horse Resources Limited Been A Good Investment?

Since shareholders would have lost about 61% over three years, some Dark Horse Resources Limited shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

David Mason is paid around the same as most CEOs of similar size companies.

After looking at EPS and total shareholder returns, it's certainly hard to argue the company has performed well, since both metrics are down. Suffice it to say, we don't think the CEO is underpaid! Whatever your view on compensation, you might want to check if insiders are buying or selling Dark Horse Resources shares (free trial).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.

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. Thank you for reading.