Luke Graham became the CEO of Strandline Resources Limited (ASX:STA) in 2016. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. 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 Luke Graham's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Strandline Resources Limited has a market cap of AU$43m, and reported total annual CEO compensation of AU$883k for the year to June 2019. We note that's an increase of 18% above last year. While we always look at total compensation first, we note that the salary component is less, at AU$365k. We examined a group of similar sized companies, with market capitalizations of below AU$291m. The median CEO total compensation in that group is AU$380k.
As you can see, Luke Graham is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Strandline Resources Limited is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at Strandline Resources has changed from year to year.
Is Strandline Resources Limited Growing?
Strandline Resources Limited has increased its earnings per share (EPS) by an average of 16% a year, over the last three years (using a line of best fit). In the last year, its revenue is down 32%.
This demonstrates that the company has been improving recently. A good result. While it would be good to see revenue growth, profits matter more in the end. You might want to check this free visual report on analyst forecasts for future earnings.
Has Strandline Resources Limited Been A Good Investment?
Boasting a total shareholder return of 60% over three years, Strandline Resources Limited has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
We compared total CEO remuneration at Strandline Resources Limited with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. On top of that, in the same period, returns to shareholders have been great. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. Shareholders may want to check for free if Strandline Resources insiders are buying or selling shares.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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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