James Earle has been the CEO of Nagambie Resources Limited (ASX:NAG) since 2016. 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 James Earle's Compensation Compare With Similar Sized Companies?
According to our data, Nagambie Resources Limited has a market capitalization of AU$26m, and paid its CEO total annual compensation worth AU$342k over the year to June 2019. That's a notable increase of 55% on last year. We think total compensation is more important but we note that the CEO salary is lower, at AU$172k. We looked at a group of companies with market capitalizations under AU$294m, and the median CEO total compensation was AU$374k.
So James Earle is paid around the average of the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
The graphic below shows how CEO compensation at Nagambie Resources has changed from year to year.
Is Nagambie Resources Limited Growing?
On average over the last three years, Nagambie Resources Limited has shrunk earnings per share by 7.7% each year (measured with a line of best fit). Its revenue is down 57% over last year.
Sadly for shareholders, earnings per share are actually down, over three years. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Nagambie Resources Limited Been A Good Investment?
Since shareholders would have lost about 58% over three years, some Nagambie Resources Limited shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.
Remuneration for James Earle is close enough to the median pay for a CEO of a similar sized company .
Returns have been disappointing and the company is not growing its earnings per share. So shareholders might not feel great about the fact that CEO pay increased on last year. Most would consider it prudent for the company to hold off any CEO pay rise until performance improves. Shareholders may want to check for free if Nagambie Resources insiders are buying or selling shares.
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.
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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. Thank you for reading.