U.S. Markets closed

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

Simply Wall St

Reinhold Schmidt became the CEO of Yancoal Australia Ltd (ASX:YAL) in 2013. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Yancoal Australia

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

Our data indicates that Yancoal Australia Ltd is worth AU$4.4b, and total annual CEO compensation is AU$3.9m. (This figure is for the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at AU$1.6m. We looked at a group of companies with market capitalizations from AU$2.8b to AU$9.1b, and the median CEO total compensation was AU$3.4m.

That means Reinhold Schmidt receives fairly typical remuneration for the CEO of a company that size. 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, July 22nd 2019

Is Yancoal Australia Ltd Growing?

On average over the last three years, Yancoal Australia Ltd has grown earnings per share (EPS) by 107% each year (using a line of best fit). Its revenue is up 86% over last year.

This demonstrates that the company has been improving recently. A good result. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. Shareholders might be interested in this free visualization of analyst forecasts.

Has Yancoal Australia Ltd Been A Good Investment?

With a total shareholder return of 14% over three years, Yancoal Australia Ltd shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

Reinhold Schmidt is paid around what is normal the leaders of comparable size companies.

We would wish for better returns (whether dividends or capital gains) but we do admire the solid EPS growth on show here. So considering these factors, we think the CEO pay is probably quite reasonable. Whatever your view on compensation, you might want to check if insiders are buying or selling Yancoal Australia shares (free trial).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.