In 2006 Mark Wilson was appointed CEO of Legend Mining Limited (ASX:LEG). 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Mark Wilson's Compensation Compare With Similar Sized Companies?
Our data indicates that Legend Mining Limited is worth AU$152m, and total annual CEO compensation was reported as AU$366k for the year to December 2019. That's less than last year. While we always look at total compensation first, we note that the salary component is less, at AU$338k. We examined a group of similar sized companies, with market capitalizations of below AU$337m. The median CEO total compensation in that group is AU$401k.
Next, let's break down remuneration compositions to understand how the industry and company compare with each other. Speaking on an industry level, we can see that nearly 68% of total compensation represents salary, while the remainder of 32% is other remuneration. According to our research, Legend Mining has allocated a higher percentage of pay to salary in comparison to the broader sector.
So Mark Wilson receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance. The graphic below shows how CEO compensation at Legend Mining has changed from year to year.
Is Legend Mining Limited Growing?
Over the last three years Legend Mining Limited has seen earnings per share (EPS) move in a positive direction by an average of 54% per year (using a line of best fit). In the last year, its revenue is up 153%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Although we don't have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Legend Mining Limited Been A Good Investment?
Most shareholders would probably be pleased with Legend Mining Limited for providing a total return of 473% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
Mark Wilson is paid around what is normal for the leaders of comparable size companies.
Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. Indeed, many might consider the pay rather modest, given the solid company performance! CEO compensation is an important area to keep your eyes on, but we've also identified 5 warning signs for Legend Mining (1 is potentially serious!) that you should be aware of before investing here.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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