In 2007 Bill Clayton was appointed CEO of Lodestar Minerals Limited (ASX:LSR). First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
How Does Bill Clayton's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Lodestar Minerals Limited has a market cap of AU$7.5m, and reported total annual CEO compensation of AU$265k for the year to June 2019. That's a notable increase of 58% on last year. While we always look at total compensation first, we note that the salary component is less, at AU$181k. We looked at a group of companies with market capitalizations under AU$295m, and the median CEO total compensation was AU$375k.
So Bill Clayton is paid around the average of 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 Lodestar Minerals has changed from year to year.
Is Lodestar Minerals Limited Growing?
Over the last three years Lodestar Minerals Limited has grown its earnings per share (EPS) by an average of 20% per year (using a line of best fit). Its revenue is down 82% over last 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. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Lodestar Minerals Limited Been A Good Investment?
With a three year total loss of 9.1%, Lodestar Minerals Limited would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
Remuneration for Bill Clayton is close enough to the median pay for a CEO of a similar sized company .
We like that the company is growing EPS, but we find the returns over the last three years to be lacking. Considering the the positives we don't think the CEO pays is too high, but it's certainly hard to argue it is too low. Whatever your view on compensation, you might want to check if insiders are buying or selling Lodestar Minerals shares (free trial).
If you want to buy a stock that is better than Lodestar Minerals, this free list of high return, low debt companies is a great place to look.
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