Anthony McClure has been the CEO of Silver Mines Limited (ASX:SVL) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Silver Mines pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
How Does Total Compensation For Anthony McClure Compare With Other Companies In The Industry?
Our data indicates that Silver Mines Limited has a market capitalization of AU$210m, and total annual CEO compensation was reported as AU$338k for the year to June 2020. This means that the compensation hasn't changed much from last year. We note that the salary portion, which stands at AU$308.2k constitutes the majority of total compensation received by the CEO.
For comparison, other companies in the industry with market capitalizations below AU$283m, reported a median total CEO compensation of AU$318k. So it looks like Silver Mines compensates Anthony McClure in line with the median for the industry. What's more, Anthony McClure holds AU$6.1m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
On an industry level, around 70% of total compensation represents salary and 30% is other remuneration. Silver Mines is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Silver Mines Limited's Growth
Silver Mines Limited's earnings per share (EPS) grew 21% per year over the last three years. Its revenue is down 7.5% over the previous year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Silver Mines Limited Been A Good Investment?
Boasting a total shareholder return of 138% over three years, Silver Mines Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
As we noted earlier, Silver Mines pays its CEO in line with similar-sized companies belonging to the same industry. Investors would surely be happy to see that returns have been great, and that EPS is up. So one could argue that CEO compensation is quite modest, if you consider company performance! In fact, shareholders might even think the CEO deserves a raise as a reward due to the fantastic returns generated.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 3 warning signs (and 1 which is significant) in Silver Mines we think you should know about.
Important note: Silver Mines is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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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