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Chris Daws became the CEO of Estrella Resources Limited (ASX:ESR) in 2017. 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.
How Does Chris Daws's Compensation Compare With Similar Sized Companies?
Our data indicates that Estrella Resources Limited is worth AU$3.7m, and total annual CEO compensation was reported as AU$263k for the year to June 2019. We think total compensation is more important but we note that the CEO salary is lower, at AU$240k. We examined a group of similar sized companies, with market capitalizations of below AU$324m. The median CEO total compensation in that group is AU$390k.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. While this is a good thing, you'll need to understand the business better before you can form an opinion.
You can see, below, how CEO compensation at Estrella Resources has changed over time.
Is Estrella Resources Limited Growing?
On average over the last three years, Estrella Resources Limited has grown earnings per share (EPS) by 23% each year (using a line of best fit). In the last year, the company lost virtually all of its revenue.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. Revenue growth is a real positive for growth, but ultimately profits are more important. Although we don't have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Estrella Resources Limited Been A Good Investment?
Given the total loss of 84% over three years, many shareholders in Estrella Resources Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
Estrella Resources Limited is currently paying its CEO below what is normal for companies of its size.
Since the business is growing, many would argue this suggests the pay is modest. Despite some positives, it is likely that shareholders wanted better returns, given the performance over the last three years. So while we don't think, Chris Daws is paid too much, shareholders may hope that business performance translates to investment returns before pay rises are given out. In this case we may want to look deeper into the company. There are some real positives and we could see improved returns in the longer term. On another note, Estrella Resources has 6 warning signs (and 3 which make us uncomfortable) we think you should know about.
Important note: Estrella Resources may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.