The CEO of PanTerra Gold Limited (ASX:PGI) is Brian Johnson. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Brian Johnson's Compensation Compare With Similar Sized Companies?
Our data indicates that PanTerra Gold Limited is worth AU$5.5m, and total annual CEO compensation was reported as US$376k for the year to December 2019. That's actually a decrease on the year before. Notably, the salary of US$376k is the vast majority of the CEO compensation. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$251k.
Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where PanTerra Gold stands. 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. Speaking on a company level, PanTerra Gold prefers to tread along a traditional path, disbursing all compensation through a salary.
Thus we can conclude that Brian Johnson receives more in total compensation than the median of a group of companies in the same market, and of similar size to PanTerra Gold Limited. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous. You can see, below, how CEO compensation at PanTerra Gold has changed over time.
Is PanTerra Gold Limited Growing?
Over the last three years PanTerra Gold Limited has seen earnings per share (EPS) move in a positive direction by an average of 29% per year (using a line of best fit). In the last year, its revenue is down 21%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has PanTerra Gold Limited Been A Good Investment?
With a three year total loss of 53%, PanTerra Gold Limited would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We examined the amount PanTerra Gold Limited pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. On the other hand returns to investors over the same period have probably disappointed many. While EPS is moving in the right direction, we'd say shareholders would want better returns before the CEO is paid much more. Shifting gears from CEO pay for a second, we've spotted 3 warning signs for PanTerra Gold you should be aware of, and 1 of them makes us a bit uncomfortable.
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.
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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