Tor McCaul has been the CEO of Comet Ridge Limited (ASX:COI) since 2009, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Comet Ridge.
Check out our latest analysis for Comet Ridge
Comparing Comet Ridge Limited's CEO Compensation With the industry
At the time of writing, our data shows that Comet Ridge Limited has a market capitalization of AU$58m, and reported total annual CEO compensation of AU$433k for the year to June 2020. That's just a smallish increase of 6.0% on last year. We note that the salary portion, which stands at AU$348.6k constitutes the majority of total compensation received by the CEO.
On comparing similar-sized companies in the industry with market capitalizations below AU$260m, we found that the median total CEO compensation was AU$350k. So it looks like Comet Ridge compensates Tor McCaul in line with the median for the industry. What's more, Tor McCaul holds AU$468k worth of shares in the company in their own name.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | AU$349k | AU$380k | 81% |
| Other | AU$84k | AU$28k | 19% |
| Total Compensation | AU$433k | AU$408k | 100% |
On an industry level, roughly 76% of total compensation represents salary and 24% is other remuneration. Comet Ridge is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Comet Ridge Limited's Growth
Over the last three years, Comet Ridge Limited has shrunk its earnings per share by 25% per year. It achieved revenue growth of 11% over the last year.
Few shareholders would be pleased to read that EPS have declined. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that EPS has gone backwards over three years. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Comet Ridge Limited Been A Good Investment?
With a three year total loss of 71% for the shareholders, Comet Ridge Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
As we touched on above, Comet Ridge Limited is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Meanwhile, EPS growth and shareholder returns have been in the red for the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 5 warning signs (and 1 which shouldn't be ignored) in Comet Ridge we think you should know about.
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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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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About ASX:COI
Comet Ridge
Engages in the oil and gas exploration, appraisal, and development activities in Australia.
Adequate balance sheet and fair value.
