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Simon Finnis has been the CEO of Metro Mining Limited (ASX:MMI) since 2015, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
How Does Total Compensation For Simon Finnis Compare With Other Companies In The Industry?
Our data indicates that Metro Mining Limited has a market capitalization of AU$92m, and total annual CEO compensation was reported as AU$572k for the year to December 2019. This means that the compensation hasn't changed much from last year. In particular, the salary of AU$435.0k, makes up a huge portion of the total compensation being paid to the CEO.
On comparing similar-sized companies in the industry with market capitalizations below AU$275m, we found that the median total CEO compensation was AU$313k. Accordingly, our analysis reveals that Metro Mining Limited pays Simon Finnis north of the industry median. Furthermore, Simon Finnis directly owns AU$286k worth of shares in the company.
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. Metro Mining is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at Metro Mining Limited's Growth Numbers
Metro Mining Limited has seen its earnings per share (EPS) increase by 86% a year over the past three years. It achieved revenue growth of 53% 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. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Metro Mining Limited Been A Good Investment?
With a three year total loss of 72% for the shareholders, Metro Mining Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
As we noted earlier, Metro Mining pays its CEO higher than the norm for similar-sized companies belonging to the same industry. However, the EPS growth is certainly impressive, but we cannot say the same about the uninspiring shareholder returns (over the last three years). Although we don't think the CEO pay is too high, considering negative investor returns, it is more generous than modest.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Metro Mining that investors should think about before committing capital to this stock.
Important note: Metro Mining 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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