Shareholders Will Most Likely Find Hammer Metals Limited's (ASX:HMX) CEO Compensation Acceptable
Key Insights
Hammer Metals to hold its Annual General Meeting on 17th of November
Salary of AU$278.6k is part of CEO Dan Thomas's total remuneration
The total compensation is similar to the average for the industry
Over the past three years, Hammer Metals' EPS grew by 26% and over the past three years, the total shareholder return was 14%
CEO Dan Thomas has done a decent job of delivering relatively good performance at Hammer Metals Limited (ASX:HMX) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 17th of November. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.
See our latest analysis for Hammer Metals
Comparing Hammer Metals Limited's CEO Compensation With The Industry
According to our data, Hammer Metals Limited has a market capitalization of AU$44m, and paid its CEO total annual compensation worth AU$330k over the year to June 2023. We note that's a decrease of 11% compared to last year. Notably, the salary which is AU$278.6k, represents most of the total compensation being paid.
In comparison with other companies in the Australian Metals and Mining industry with market capitalizations under AU$315m, the reported median total CEO compensation was AU$392k. This suggests that Hammer Metals remunerates its CEO largely in line with the industry average. What's more, Dan Thomas holds AU$242k worth of shares in the company in their own name.
Component | 2023 | 2022 | Proportion (2023) |
Salary | AU$279k | AU$270k | 84% |
Other | AU$51k | AU$100k | 16% |
Total Compensation | AU$330k | AU$370k | 100% |
On an industry level, around 61% of total compensation represents salary and 39% is other remuneration. Hammer Metals is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at Hammer Metals Limited's Growth Numbers
Hammer Metals Limited has seen its earnings per share (EPS) increase by 26% a year over the past three years. Its revenue is down 11% over the previous year.
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 Hammer Metals Limited Been A Good Investment?
Hammer Metals Limited has generated a total shareholder return of 14% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
In Summary...
Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. In saying that, any proposed increase to CEO compensation will still be assessed on how reasonable it is based on performance and industry benchmarks.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 4 warning signs for Hammer Metals (2 shouldn't be ignored!) that you should be aware of before investing here.
Switching gears from Hammer Metals, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
