Wade Johnson has been the CEO of Lefroy Exploration Limited (ASX:LEX) since 2016. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Wade Johnson's Compensation Compare With Similar Sized Companies?
According to our data, Lefroy Exploration Limited has a market capitalization of AU$18m, and paid its CEO total annual compensation worth AU$319k over the year to June 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$220k. We looked at a group of companies with market capitalizations under AU$291m, and the median CEO total compensation was AU$379k.
So Wade Johnson receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
The graphic below shows how CEO compensation at Lefroy Exploration has changed from year to year.
Is Lefroy Exploration Limited Growing?
Lefroy Exploration Limited has reduced its earnings per share by an average of 49% a year, over the last three years (measured with a line of best fit). It achieved revenue growth of 150% over the last year.
Investors should note that, over three years, earnings per share are down. But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. Although we don't have analyst forecasts shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Lefroy Exploration Limited Been A Good Investment?
With a total shareholder return of 8.8% over three years, Lefroy Exploration Limited has done okay by shareholders. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
Remuneration for Wade Johnson is close enough to the median pay for a CEO of a similar sized company .
The company isn't showing particularly great growth, and shareholder turns haven't been particularly inspiring in the last few years. While there is room for improvement, we haven't seen evidence to suggest the pay is too generous. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Lefroy Exploration (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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