Ken Allen has been the CEO of Nex Metals Explorations Limited (ASX:NME) since 2007. 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 we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Ken Allen's Compensation Compare With Similar Sized Companies?
Our data indicates that Nex Metals Explorations Limited is worth AU$2.3m, and total annual CEO compensation was reported as AU$134k for the year to June 2019. We think total compensation is more important but we note that the CEO salary is lower, at AU$122k. We looked at a group of companies with market capitalizations under AU$289m, and the median CEO total compensation was AU$379k.
Most shareholders would consider it a positive that Ken Allen 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, below, how CEO compensation at Nex Metals Explorations has changed over time.
Is Nex Metals Explorations Limited Growing?
On average over the last three years, Nex Metals Explorations Limited has shrunk earnings per share by 75% each year (measured with a line of best fit). Its revenue is down 1.5% over last year.
Sadly for shareholders, earnings per share are actually down, over three years. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Nex Metals Explorations Limited Been A Good Investment?
Boasting a total shareholder return of 50% over three years, Nex Metals Explorations 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.
Nex Metals Explorations Limited is currently paying its CEO below what is normal for companies of its size.
Ken Allen is paid less than CEOs of similar size companies. While the company isn't growing on our analysis, shareholder returns have been good in recent years. So, while it would be nice to have EPS growth, on our analysis the CEO compensation is not an issue. So you may want to check if insiders are buying Nex Metals Explorations shares with their own money (free access).
If you want to buy a stock that is better than Nex Metals Explorations, 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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