In 2013 Maynard Smith was appointed CEO of Byron Energy Limited (ASX:BYE). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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.
How Does Maynard Smith’s Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Byron Energy Limited has a market cap of AU$284m, and reported total annual CEO compensation of US$877k for the year to June 2019. We think total compensation is more important but we note that the CEO salary is lower, at . We further remind readers that the CEO may face performance requirements to receive the non-salary part of the total compensation. When we examined a selection of companies with market caps ranging from US$100m to US$400m, we found the median CEO total compensation was US$453k.
It would therefore appear that Byron Energy Limited pays Maynard Smith more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Byron Energy has changed over time.
Is Byron Energy Limited Growing?
Byron Energy Limited has increased its earnings per share (EPS) by an average of 121% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 228%.
This shows that the company has improved itself over the last few years. Good news for shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. It could be important to check this free visual depiction of what analysts expect for the future.
Has Byron Energy Limited Been A Good Investment?
I think that the total shareholder return of 193%, over three years, would leave most Byron Energy Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
We examined the amount Byron Energy Limited pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
However, the earnings per share growth over three years is certainly impressive. On top of that, in the same period, returns to shareholders have been great. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. Whatever your view on compensation, you might want to check if insiders are buying or selling Byron Energy shares (free trial).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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