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James Earle became the CEO of Nagambie Resources Limited (ASX:NAG) in 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does James Earle's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Nagambie Resources Limited has a market cap of AU$27m, and reported total annual CEO compensation of AU$342k for the year to June 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$172k. We looked at a group of companies with market capitalizations under AU$312m, and the median CEO total compensation was AU$389k.
Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Nagambie Resources. Talking in terms of the sector, salary represented approximately 69% of total compensation out of all the companies we analysed, while other remuneration made up 31% of the pie. So it seems like there isn't a significant difference between Nagambie Resources and the broader market, in terms of salary allocation in the overall compensation package.
That means James Earle receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance. You can see, below, how CEO compensation at Nagambie Resources has changed over time.
Is Nagambie Resources Limited Growing?
Nagambie Resources Limited has seen earnings per share (EPS) move positively by an average of 14% a year, over the last three years (using a line of best fit). It saw its revenue drop 70% over the last year.
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. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Nagambie Resources Limited Been A Good Investment?
With a total shareholder return of 8.0% over three years, Nagambie Resources Limited has done okay by shareholders. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
Remuneration for James Earle is close enough to the median pay for a CEO of a similar sized company .
Shareholder returns could be better but shareholders would be pleased with the positive EPS growth. As a result of these considerations, I would suggest the CEO pay is reasonable. CEO compensation is an important area to keep your eyes on, but we've also identified 6 warning signs for Nagambie Resources (2 are concerning!) that you should be aware of before investing here.
If you want to buy a stock that is better than Nagambie Resources, this free list of high return, low debt companies is a great place to look.
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.
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