U.S. markets closed
  • S&P 500

    3,269.96
    -40.15 (-1.21%)
     
  • Dow 30

    26,501.60
    -157.51 (-0.59%)
     
  • Nasdaq

    10,911.59
    -274.00 (-2.45%)
     
  • Russell 2000

    1,538.48
    -23.10 (-1.48%)
     
  • Crude Oil

    35.72
    -0.45 (-1.24%)
     
  • Gold

    1,878.80
    +10.80 (+0.58%)
     
  • Silver

    23.72
    +0.35 (+1.52%)
     
  • EUR/USD

    1.1650
    -0.0029 (-0.24%)
     
  • 10-Yr Bond

    0.8600
    +0.0250 (+2.99%)
     
  • GBP/USD

    1.2951
    +0.0028 (+0.22%)
     
  • USD/JPY

    104.6200
    +0.0100 (+0.01%)
     
  • BTC-USD

    13,754.15
    +139.53 (+1.02%)
     
  • CMC Crypto 200

    265.42
    +1.78 (+0.68%)
     
  • FTSE 100

    5,577.27
    -4.48 (-0.08%)
     
  • Nikkei 225

    22,977.13
    -354.81 (-1.52%)
     

Is Thomson Resources Ltd's (ASX:TMZ) CEO Salary Justified?

Simply Wall St
·3 mins read

The CEO of Thomson Resources Ltd (ASX:TMZ) is Eoin Rothery. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for Thomson Resources

How Does Eoin Rothery's Compensation Compare With Similar Sized Companies?

Our data indicates that Thomson Resources Ltd is worth AU$2.0m, and total annual CEO compensation was reported as AU$159k for the year to June 2019. We think total compensation is more important but we note that the CEO salary is lower, at AU$114k. We looked at a group of companies with market capitalizations under AU$305m, and the median CEO total compensation was AU$388k.

Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Thomson Resources. On a sector level, around 70% of total compensation represents salary and 30% is other remuneration. So it seems like there isn't a significant difference between Thomson Resources and the broader market, in terms of salary allocation in the overall compensation package.

Most shareholders would consider it a positive that Eoin Rothery takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance. The graphic below shows how CEO compensation at Thomson Resources has changed from year to year.

ASX:TMZ CEO Compensation May 22nd 2020
ASX:TMZ CEO Compensation May 22nd 2020

Is Thomson Resources Ltd Growing?

Thomson Resources Ltd has reduced its earnings per share by an average of 46% a year, over the last three years (measured with a line of best fit). In the last year, its revenue has collapsed effectively to zero.

Unfortunately, earnings per share have trended lower over the last three years. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Thomson Resources Ltd Been A Good Investment?

Given the total loss of 65% over three years, many shareholders in Thomson Resources Ltd are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

It looks like Thomson Resources Ltd pays its CEO less than similar sized companies.

Shareholders should note that compensation for Eoin Rothery is under the median of a group of similar sized companies. But then, EPS growth is lacking and so are the returns to shareholders. We would not call the pay too generous, but nor would we claim the CEO is underpaid, given lacklustre business performance. Shifting gears from CEO pay for a second, we've spotted 5 warning signs for Thomson Resources you should be aware of, and 4 of them are a bit unpleasant.

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.