Chris Ringrose has been the CEO of Cullen Resources Limited (ASX:CUL) since 2006. 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.
How Does Chris Ringrose’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Cullen Resources Limited has a market cap of AU$3.1m, and is paying total annual CEO compensation of AU$217k. (This is based on the year to June 2018). We think total compensation is more important but we note that the CEO salary is lower, at AU$180k. We took a group of companies with market capitalizations below AU$295m, and calculated the median CEO total compensation to be AU$357k.
Most shareholders would consider it a positive that Chris Ringrose takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
The graphic below shows how CEO compensation at Cullen Resources has changed from year to year.
Is Cullen Resources Limited Growing?
On average over the last three years, Cullen Resources Limited has grown earnings per share (EPS) by 22% each year (using a line of best fit). Its revenue is down -88% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. Revenue growth is a real positive for growth, but ultimately profits are more important.
Has Cullen Resources Limited Been A Good Investment?
With a three year total loss of 74%, Cullen Resources Limited would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
It looks like Cullen Resources Limited pays its CEO less than similar sized companies. Many would consider this to indicate that the pay is modest since the business is growing. Unfortunately, some shareholders may be disappointed with their returns, given the company’s performance over the last three years. So while we would not say that Chris Ringrose is generously paid, it would be good to see an improvement in business performance before too an increase in pay.
In this case we may want to look deeper into the company. There are some real positives and we could see improved returns in the longer term. Whatever your view on compensation, you might want to check if insiders are buying or selling Cullen Resources shares (free trial).
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.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.