In 2013 Rebecca Holland-Kennedy was appointed CEO of PepinNini Lithium Limited (ASX:PNN). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Rebecca Holland-Kennedy's Compensation Compare With Similar Sized Companies?
According to our data, PepinNini Lithium Limited has a market capitalization of AU$4.3m, and paid its CEO total annual compensation worth AU$196k over the year to June 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$179k. We looked at a group of companies with market capitalizations under AU$290m, and the median CEO total compensation was AU$381k.
Most shareholders would consider it a positive that Rebecca Holland-Kennedy takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it's important we delve into the performance of the actual business.
You can see a visual representation of the CEO compensation at PepinNini Lithium, below.
Is PepinNini Lithium Limited Growing?
On average over the last three years, PepinNini Lithium Limited has grown earnings per share (EPS) by 63% each year (using a line of best fit). It saw its revenue drop 95% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. While it would be good to see revenue growth, profits matter more in the end. 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 PepinNini Lithium Limited Been A Good Investment?
Given the total loss of 83% over three years, many shareholders in PepinNini Lithium Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
It appears that PepinNini Lithium Limited remunerates its CEO below most similar sized companies.
Considering the underlying business is growing earnings, this would suggest the pay is modest. Despite some positives, it is likely that shareholders wanted better returns, given the performance over the last three years. We're not critical of the remuneration Rebecca Holland-Kennedy receives, but it would be good to see improved returns to shareholders before the remuneration grows too much. This sort of circumstance certainly justifies further research, because the investment returns might still come in the future. Whatever your view on compensation, you might want to check if insiders are buying or selling PepinNini Lithium shares (free trial).
Important note: PepinNini Lithium may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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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