Mark Gray has been the CEO of Allegiance Coal Limited (ASX:AHQ) since 2017. 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. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Mark Gray's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Allegiance Coal Limited has a market cap of AU$72m, and reported total annual CEO compensation of AU$401k for the year to June 2019. Notably, that's an increase of 25% over the year before. We think total compensation is more important but we note that the CEO salary is lower, at AU$342k. We examined a group of similar sized companies, with market capitalizations of below AU$295m. The median CEO total compensation in that group is AU$378k.
So Mark Gray receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
The graphic below shows how CEO compensation at Allegiance Coal has changed from year to year.
Is Allegiance Coal Limited Growing?
Over the last three years Allegiance Coal Limited has grown its earnings per share (EPS) by an average of 120% per year (using a line of best fit). In the last year, its revenue is down 24%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. Revenue growth is a real positive for growth, but ultimately profits are more important. Although we don't have analyst forecasts shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Allegiance Coal Limited Been A Good Investment?
Most shareholders would probably be pleased with Allegiance Coal Limited for providing a total return of 194% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
Remuneration for Mark Gray is close enough to the median pay for a CEO of a similar sized company .
Shareholders would surely be happy to see that shareholder returns have been great, and the earnings per share are up. So one could argue the CEO compensation is quite modest, if you consider company performance! Shareholders may want to check for free if Allegiance Coal insiders are buying or selling shares.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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 email@example.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.