How Does Image Resources' (ASX:IMA) CEO Pay Compare With Company Performance?

Patrick Mutz became the CEO of Image Resources NL (ASX:IMA) in 2016, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Image Resources pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Image Resources

Comparing Image Resources NL's CEO Compensation With the industry

According to our data, Image Resources NL has a market capitalization of AU$167m, and paid its CEO total annual compensation worth AU$653k over the year to December 2019. Notably, that's an increase of 45% over the year before. We note that the salary portion, which stands at AU$426.1k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the industry with market capitalizations below AU$286m, we found that the median total CEO compensation was AU$307k. Accordingly, our analysis reveals that Image Resources NL pays Patrick Mutz north of the industry median. What's more, Patrick Mutz holds AU$454k worth of shares in the company in their own name.

Talking in terms of the industry, salary represented approximately 70% of total compensation out of all the companies we analyzed, while other remuneration made up 30% of the pie. There isn't a significant difference between Image Resources and the broader market, in terms of salary allocation in the overall compensation package. 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.

Image Resources NL's Growth

Image Resources NL has seen its earnings per share (EPS) increase by 105% a year over the past three years. Its revenue is up 759% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth we like to see. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Image Resources NL Been A Good Investment?

Boasting a total shareholder return of 79% over three years, Image Resources NL has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

As we touched on above, Image Resources NL is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Importantly though, earnings per share growth and shareholder returns are very impressive over the last three years. Considering such exceptional results for the company, we'd venture to say CEO compensation is fair. And given most shareholders are probably very happy with recent returns, they might even think that Patrick deserves a raise!

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Image Resources that investors should think about before committing capital to this stock.

Important note: Image Resources is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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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