Does Stavely Minerals Limited's (ASX:SVY) CEO Salary Reflect Performance?
Chris Cairns has been the CEO of Stavely Minerals Limited (ASX:SVY) since 2006. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for Stavely Minerals
How Does Chris Cairns's Compensation Compare With Similar Sized Companies?
According to our data, Stavely Minerals Limited has a market capitalization of AU$146m, and paid its CEO total annual compensation worth AU$442k over the year to June 2019. While we always look at total compensation first, we note that the salary component is less, at AU$199k. We took a group of companies with market capitalizations below AU$298m, and calculated the median CEO total compensation to be AU$379k.
So Chris Cairns 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 Stavely Minerals has changed from year to year.
Is Stavely Minerals Limited Growing?
On average over the last three years, Stavely Minerals Limited has shrunk earnings per share by 27% each year (measured with a line of best fit). It achieved revenue growth of 1.8% over the last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the modest revenue growth over 12 months isn't much comfort against the reduced earnings per share. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Stavely Minerals Limited Been A Good Investment?
I think that the total shareholder return of 389%, over three years, would leave most Stavely Minerals Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
Chris Cairns is paid around what is normal the leaders of comparable size companies.
We're not seeing great strides in earnings per share, but the company has clearly pleased some investors, given the returns over the last three years. So we think most shareholders wouldn't be too worried about CEO compensation, which is close to the median for similar sized companies. So you may want to check if insiders are buying Stavely Minerals shares with their own money (free access).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity 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.
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