A Quick Analysis On Beacon Minerals' (ASX:BCN) CEO Compensation
Graham McGarry has been the CEO of Beacon Minerals Limited (ASX:BCN) since 2012, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Beacon Minerals pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Check out our latest analysis for Beacon Minerals
Comparing Beacon Minerals Limited's CEO Compensation With the industry
According to our data, Beacon Minerals Limited has a market capitalization of AU$109m, and paid its CEO total annual compensation worth AU$164k over the year to June 2020. That's mostly flat as compared to the prior year's compensation. In particular, the salary of AU$150.0k, makes up a huge portion of the total compensation being paid to the CEO.
For comparison, other companies in the industry with market capitalizations below AU$263m, reported a median total CEO compensation of AU$310k. This suggests that Graham McGarry is paid below the industry median. Furthermore, Graham McGarry directly owns AU$9.3m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2020 | 2019 | Proportion (2020) |
Salary | AU$150k | AU$150k | 91% |
Other | AU$14k | AU$14k | 9% |
Total Compensation | AU$164k | AU$164k | 100% |
Talking in terms of the industry, salary represented approximately 70% of total compensation out of all the companies we analyzed, while other remuneration made up 30% of the pie. Beacon Minerals is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Beacon Minerals Limited's Growth
Over the past three years, Beacon Minerals Limited has seen its earnings per share (EPS) grow by 53% per year. It achieved revenue growth of 866% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Beacon Minerals Limited Been A Good Investment?
Boasting a total shareholder return of 142% over three years, Beacon Minerals Limited has done well by shareholders. 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...
As we touched on above, Beacon Minerals Limited is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Since EPS growth is heading in a positive direction; many would agree with our assessment that the pay is modest. And given most shareholders are probably very happy with recent shareholder returns, they might even think Graham deserves a raise!
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 3 warning signs (and 1 which doesn't sit too well with us) in Beacon Minerals we think you should know about.
Important note: Beacon Minerals is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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