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What We Learned About Bougainville Copper's (ASX:BOC) CEO Pay

Simply Wall St

Mel Togolo has been the CEO of Bougainville Copper Limited (ASX:BOC) since 2018, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Bougainville Copper pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Bougainville Copper

Comparing Bougainville Copper Limited's CEO Compensation With the industry

Our data indicates that Bougainville Copper Limited has a market capitalization of AU$106m, and total annual CEO compensation was reported as K739k for the year to December 2019. We note that's a decrease of 18% compared to last year. We note that the salary portion, which stands at K449.0k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the industry with market capitalizations below AU$274m, we found that the median total CEO compensation was K764k. So it looks like Bougainville Copper compensates Mel Togolo in line with the median for the industry.

Component

2019

2018

Proportion (2019)

Salary

K449k

K604k

61%

Other

K290k

K300k

39%

Total Compensation

K739k

K904k

100%

Talking in terms of the industry, salary represented approximately 70% of total compensation out of all the companies we analyzed, while other remuneration made up 30% of the pie. It's interesting to note that Bougainville Copper allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

ceo-compensation
ceo-compensation

Bougainville Copper Limited's Growth

Over the last three years, Bougainville Copper Limited has shrunk its earnings per share by 11% per year. In the last year, its revenue is down 30%.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Bougainville Copper Limited Been A Good Investment?

With a three year total loss of 26% for the shareholders, Bougainville Copper Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

As we noted earlier, Bougainville Copper pays its CEO in line with similar-sized companies belonging to the same industry. Meanwhile, EPS growth and shareholder returns have been in the red for the last three years. We'd stop short of saying compensation is inappropriate, but we would understand if shareholders had questions regarding a future raise.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 3 warning signs for Bougainville Copper (of which 1 doesn't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.