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Should You Worry About Millrock Resources Inc.'s (CVE:MRO) CEO Pay?

Simply Wall St

In 2007 Greg Beischer was appointed CEO of Millrock Resources Inc. (CVE:MRO). 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. 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.

Check out our latest analysis for Millrock Resources

How Does Greg Beischer's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Millrock Resources Inc. has a market cap of CA$16m, and reported total annual CEO compensation of CA$259k for the year to December 2018. Notably, the salary of CA$259k is the vast majority of the CEO compensation. We took a group of companies with market capitalizations below CA$265m, and calculated the median CEO total compensation to be CA$180k.

It would therefore appear that Millrock Resources Inc. pays Greg Beischer more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see, below, how CEO compensation at Millrock Resources has changed over time.

TSXV:MRO CEO Compensation, November 18th 2019

Is Millrock Resources Inc. Growing?

On average over the last three years, Millrock Resources Inc. has grown earnings per share (EPS) by 3.3% each year (using a line of best fit). It achieved revenue growth of 245% over the last year.

It's hard to interpret the strong revenue growth as anything other than a positive. With that in mind, the modestly improving EPS seems positive. I'd stop short of saying the business performance is amazing, but there are enough positives to justify further research, or even adding the stock to your watch-list. Although we don't have analyst forecasts you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Millrock Resources Inc. Been A Good Investment?

Since shareholders would have lost about 65% over three years, some Millrock Resources Inc. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We compared the total CEO remuneration paid by Millrock Resources Inc., and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

The growth in the business has been uninspiring, but the shareholder returns have arguably been worse, over the last three years. Shareholders may wish to consider further research. Although we don't think the CEO pay is too high, it is probably more on the generous side of things. So you may want to check if insiders are buying Millrock Resources shares with their own money (free access).

Important note: Millrock 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.

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.

If you spot an error that warrants correction, please contact the editor at 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.