Tony Rovira has been the CEO of Azure Minerals Limited (ASX:AZS) since 2003, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Azure Minerals pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing Azure Minerals Limited's CEO Compensation With the industry
At the time of writing, our data shows that Azure Minerals Limited has a market capitalization of AU$42m, and reported total annual CEO compensation of AU$470k for the year to June 2020. That's a slightly lower by 4.6% over the previous year. In particular, the salary of AU$387.4k, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the industry with market capitalizations under AU$285m, the reported median total CEO compensation was AU$308k. This suggests that Tony Rovira is paid more than the median for the industry. Moreover, Tony Rovira also holds AU$141k worth of Azure Minerals stock directly under their own name.
Talking in terms of the industry, salary represented approximately 68% of total compensation out of all the companies we analyzed, while other remuneration made up 32% of the pie. Azure Minerals is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
A Look at Azure Minerals Limited's Growth Numbers
Azure Minerals Limited's earnings per share (EPS) grew 16% per year over the last three years. It achieved revenue growth of 139% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Azure Minerals Limited Been A Good Investment?
With a three year total loss of 49% for the shareholders, Azure Minerals Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
As we noted earlier, Azure Minerals pays its CEO higher than the norm for similar-sized companies belonging to the same industry. However, we must not forget that the EPS growth has been very strong, but we cannot say the same about the uninspiring shareholder returns (over the last three years). Although we don't think the CEO pay is too high, considering negative investor returns, it is more generous than modest.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 5 warning signs for Azure Minerals (of which 3 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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