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Is Tertiary Minerals plc's (LON:TYM) CEO Paid Enough Relative To Peers?

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Simply Wall St
·3 min read
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Ric Clemmey has been the CEO of Tertiary Minerals plc (LON:TYM) since 2013. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for Tertiary Minerals

How Does Ric Clemmey's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Tertiary Minerals plc has a market cap of UK£1.7m, and reported total annual CEO compensation of UK£87k for the year to September 2019. It is worth noting that the CEO compensation consists almost entirely of the salary, worth UK£87k. We examined a group of similar sized companies, with market capitalizations of below UK£163m. The median CEO total compensation in that group is UK£275k.

Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Tertiary Minerals 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. At the company level, Tertiary Minerals pays Ric Clemmey solely through a salary, preferring to go down a conventional route.

Most shareholders would consider it a positive that Ric Clemmey takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it's important we delve into the performance of the actual business. You can see, below, how CEO compensation at Tertiary Minerals has changed over time.

AIM:TYM CEO Compensation May 21st 2020
AIM:TYM CEO Compensation May 21st 2020

Is Tertiary Minerals plc Growing?

On average over the last three years, Tertiary Minerals plc has shrunk earnings per share by 42% each year (measured with a line of best fit). Its revenue is down 13% over last year.

Unfortunately, earnings per share have trended lower over the last three years. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Tertiary Minerals plc Been A Good Investment?

With a three year total loss of 68%, Tertiary Minerals plc would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

It appears that Tertiary Minerals plc remunerates its CEO below most similar sized companies.

The compensation paid to Ric Clemmey is lower than is usual at similar sized companies, but the eps growth is lacking, just like the returns (over three years). We would not call the pay too generous, but nor would we claim the CEO is underpaid, given lacklustre business performance. CEO compensation is an important area to keep your eyes on, but we've also identified 5 warning signs for Tertiary Minerals (4 are concerning!) that you should be aware of before investing here.

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.

Love or hate this article? Concerned about the content? Get in touch with us directly. Alternatively, email 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. 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. Thank you for reading.