Is Saracen Mineral Holdings Limited’s (ASX:SAR) CEO Paid Enough Relative To Peers?
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In 2013 Raleigh Finlayson was appointed CEO of Saracen Mineral Holdings Limited (ASX:SAR). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
View our latest analysis for Saracen Mineral Holdings
How Does Raleigh Finlayson’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Saracen Mineral Holdings Limited has a market cap of AU$2.7b, and is paying total annual CEO compensation of AU$1.9m. (This is based on the year to 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at AU$716k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of AU$1.4b to AU$4.4b. The median total CEO compensation was AU$2.4m.
So Raleigh Finlayson 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 Saracen Mineral Holdings has changed from year to year.
Is Saracen Mineral Holdings Limited Growing?
Saracen Mineral Holdings Limited has increased its earnings per share (EPS) by an average of 56% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 21%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. You might want to check this free visual report on analyst forecasts for future earnings.
Has Saracen Mineral Holdings Limited Been A Good Investment?
I think that the total shareholder return of 315%, over three years, would leave most Saracen Mineral Holdings Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary…
Remuneration for Raleigh Finlayson is close enough to the median pay for a CEO of a similar sized company .
The company is growing earnings per share and total shareholder returns have been pleasing. So one could argue the CEO compensation is quite modest, if you consider company performance! Shareholders may want to check for free if Saracen Mineral Holdings 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.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
