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Is Yancoal Australia Ltd (ASX:YAL) Overpaying Its CEO?

Simply Wall St

In 2013 Reinhold Schmidt was appointed CEO of Yancoal Australia Ltd (ASX:YAL). 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 - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

See our latest analysis for Yancoal Australia

How Does Reinhold Schmidt's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Yancoal Australia Ltd has a market cap of AU$3.8b, and reported total annual CEO compensation of AU$3.9m for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at AU$1.6m. We looked at a group of companies with market capitalizations from AU$2.9b to AU$9.4b, and the median CEO total compensation was AU$3.3m.

So Reinhold Schmidt receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

You can see, below, how CEO compensation at Yancoal Australia has changed over time.

ASX:YAL CEO Compensation, January 24th 2020

Is Yancoal Australia Ltd Growing?

Over the last three years Yancoal Australia Ltd has grown its earnings per share (EPS) by an average of 129% per year (using a line of best fit). In the last year, its revenue is up 18%.

This demonstrates that the company has been improving recently. A good result. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. You might want to check this free visual report on analyst forecasts for future earnings.

Has Yancoal Australia Ltd Been A Good Investment?

With a three year total loss of 79%, Yancoal Australia Ltd would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

Remuneration for Reinhold Schmidt is close enough to the median pay for a CEO of a similar sized company .

We like that the company is growing EPS, but it's disappointing to see negative shareholder returns over three years. 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. Shareholders may want to check for free if Yancoal Australia insiders are buying or selling shares.

Important note: Yancoal Australia 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 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.

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.