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How Should Investors Feel About GTI Resources Limited's (ASX:GTR) CEO Pay?

Simply Wall St

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Murray McDonald is the CEO of GTI Resources Limited (ASX:GTR). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for GTI Resources

How Does Murray McDonald's Compensation Compare With Similar Sized Companies?

According to our data, GTI Resources Limited has a market capitalization of AU$2.0m, and pays its CEO total annual compensation worth AU$199k. (This number is for the twelve months until December 2018). That's below the compensation, last year. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$177k. We looked at a group of companies with market capitalizations under AU$287m, and the median CEO total compensation was AU$358k.

A first glance this seems like a real positive for shareholders, since Murray McDonald is paid less than the average total compensation paid by similar sized companies. While this is a good thing, you'll need to understand the business better before you can form an opinion.

You can see a visual representation of the CEO compensation at GTI Resources, below.

ASX:GTR CEO Compensation, June 26th 2019

Is GTI Resources Limited Growing?

On average over the last three years, GTI Resources Limited has grown earnings per share (EPS) by 26% each year (using a line of best fit). It achieved revenue growth of 1414% over the last year.

This demonstrates that the company has been improving recently. A good result. 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 might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has GTI Resources Limited Been A Good Investment?

GTI Resources Limited has generated a total shareholder return of 14% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

It looks like GTI Resources Limited pays its CEO less than similar sized companies. Since the business is growing, many would argue this suggests the pay is modest. While returns over the last few years haven't been top notch, there is nothing to suggest to us that Murray McDonald is overcompensated.

Few would complain about reasonable CEO remuneration when the business is growing earnings per share. It would be an additional positive if insiders are buying shares. Shareholders may want to check for free if GTI Resources insiders are buying or selling shares.

If you want to buy a stock that is better than GTI Resources, this free list of high return, low debt companies is a great place to look.

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.