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Is NuCoal Resources Limited (ASX:NCR) Excessively Paying Its CEO?

Simply Wall St

Megan Etcell became the CEO of NuCoal Resources Limited (ASX:NCR) in 2017. 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 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.

View our latest analysis for NuCoal Resources

How Does Megan Etcell's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that NuCoal Resources Limited has a market cap of AU$12m, and reported total annual CEO compensation of AU$167k for the year to June 2019. That's below the compensation, last year. While we always look at total compensation first, we note that the salary component is less, at . We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. 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$379k.

A first glance this seems like a real positive for shareholders, since Megan Etcell is paid less than the average total compensation paid by similar sized companies. Though positive, it's important we delve into the performance of the actual business.

The graphic below shows how CEO compensation at NuCoal Resources has changed from year to year.

ASX:NCR CEO Compensation, December 21st 2019

Is NuCoal Resources Limited Growing?

NuCoal Resources Limited has increased its earnings per share (EPS) by an average of 82% 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. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Although we don't have analyst forecasts you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has NuCoal Resources Limited Been A Good Investment?

I think that the total shareholder return of 275%, over three years, would leave most NuCoal Resources Limited shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

NuCoal Resources Limited is currently paying its CEO below what is normal for companies of its size.

Since the business is growing, many would argue this suggests the pay is modest. The pleasing shareholder returns are the cherry on top; you might even consider that Megan Etcell deserves a raise! Most shareholders like to see a modestly paid CEO combined with strong performance by the company. The cherry on top would be if company insiders are buying shares with their own money. So you may want to check if insiders are buying NuCoal Resources shares with their own money (free access).

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 editorial-team@simplywallst.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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