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Should You Be Pleased About The CEO Pay At Bannerman Resources Limited's (ASX:BMN)

Simply Wall St

Brandon Munro became the CEO of Bannerman Resources Limited (ASX:BMN) in 2016. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for Bannerman Resources

How Does Brandon Munro's Compensation Compare With Similar Sized Companies?

Our data indicates that Bannerman Resources Limited is worth AU$43m, and total annual CEO compensation was reported as AU$514k for the year to June 2019. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$260k. We took a group of companies with market capitalizations below AU$312m, and calculated the median CEO total compensation to be AU$392k.

Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Bannerman Resources stands. Speaking on an industry level, we can see that nearly 70% of total compensation represents salary, while the remainder of 30% is other remuneration. Bannerman Resources is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation

As you can see, Brandon Munro is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Bannerman Resources Limited is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business. The graphic below shows how CEO compensation at Bannerman Resources has changed from year to year.

ASX:BMN CEO Compensation May 7th 2020
ASX:BMN CEO Compensation May 7th 2020

Is Bannerman Resources Limited Growing?

Bannerman Resources Limited has seen earnings per share (EPS) move positively 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 75%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. Although we don't have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Bannerman Resources Limited Been A Good Investment?

Since shareholders would have lost about 4.7% over three years, some Bannerman Resources Limited shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

We compared total CEO remuneration at Bannerman Resources Limited with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.

However, the earnings per share growth over three years is certainly impressive. Having said that, shareholders may be disappointed with the weak returns over the last three years. Considering positive per-share earnings movement, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. Taking a breather from CEO compensation, we've spotted 6 warning signs for Bannerman Resources (of which 2 are significant!) you should know about in order to have a holistic understanding of the stock.

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 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.