David Prentice became the CEO of Brookside Energy Limited (ASX:BRK) in 2004. First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does David Prentice’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Brookside Energy Limited has a market cap of AU$12m, and is paying total annual CEO compensation of AU$180k. (This number is for the twelve months until December 2018). Notably, the salary of AU$180k is the vast majority of the CEO compensation. We examined a group of similar sized companies, with market capitalizations of below AU$284m. The median CEO total compensation in that group is AU$353k.
Most shareholders would consider it a positive that David Prentice takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it’s important we delve into the performance of the actual business.
The graphic below shows how CEO compensation at Brookside Energy has changed from year to year.
Is Brookside Energy Limited Growing?
On average over the last three years, Brookside Energy Limited has grown earnings per share (EPS) by 80% each year (using a line of best fit). Its revenue is up 238% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly.
Has Brookside Energy Limited Been A Good Investment?
Most shareholders would probably be pleased with Brookside Energy Limited for providing a total return of 33% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
It looks like Brookside Energy Limited pays its CEO less than similar sized companies. Considering the underlying business is growing earnings, this would suggest the pay is modest. The strong history of shareholder returns might even have some thinking that David Prentice deserves a raise!
Most shareholders like to see a modestly paid CEO combined with strong performance by the company. The cherry on top would be if company insiders are buying shares with their own money. Shareholders may want to check for free if Brookside Energy insiders are buying or selling shares.
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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If you spot an error that warrants correction, please contact the editor at email@example.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. Thank you for reading.