Should You Worry About European Cobalt Limited's (ASX:EUC) CEO Pay Cheque?

Rob Jewson became the CEO of European Cobalt Limited (ASX:EUC) in 2017. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for European Cobalt

How Does Rob Jewson's Compensation Compare With Similar Sized Companies?

Our data indicates that European Cobalt Limited is worth AU$8.4m, and total annual CEO compensation was reported as AU$307k for the year to June 2019. We think total compensation is more important but we note that the CEO salary is lower, at AU$280k. We took a group of companies with market capitalizations below AU$304m, and calculated the median CEO total compensation to be AU$383k.

So Rob Jewson receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.

The graphic below shows how CEO compensation at European Cobalt has changed from year to year.

Is European Cobalt Limited Growing?

Over the last three years European Cobalt Limited has grown its earnings per share (EPS) by an average of 112% per year (using a line of best fit). It achieved revenue growth of 16% over the last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. Although we don't have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has European Cobalt Limited Been A Good Investment?

Since shareholders would have lost about 78% over three years, some European Cobalt Limited shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

Rob Jewson is paid around what is normal the leaders of comparable size companies.

We'd say the company can boast of its EPS growth, but we cannot say the same about the lacklustre shareholder returns (over the last three years). Considering the improvement in earnings per share, one could argue that the CEO pay is appropriate, albeit not too low. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling European Cobalt (free visualization of insider trades).

If you want to buy a stock that is better than European Cobalt, this free list of high return, low debt companies is a great place to look.

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.

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. Thank you for reading.