What Can We Make Of Alicanto Minerals' (ASX:AQI) CEO Compensation?

This article will reflect on the compensation paid to Peter George who has served as CEO of Alicanto Minerals Limited (ASX:AQI) since 2018. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Alicanto Minerals.

See our latest analysis for Alicanto Minerals

How Does Total Compensation For Peter George Compare With Other Companies In The Industry?

According to our data, Alicanto Minerals Limited has a market capitalization of AU$31m, and paid its CEO total annual compensation worth AU$230k over the year to June 2020. That's a notable decrease of 15% on last year. In particular, the salary of AU$200.0k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the industry with market capitalizations below AU$261m, we found that the median total CEO compensation was AU$306k. This suggests that Alicanto Minerals remunerates its CEO largely in line with the industry average. Furthermore, Peter George directly owns AU$845k worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, around 69% of total compensation represents salary and 31% is other remuneration. Alicanto Minerals pays out 87% of remuneration in the form of a salary, significantly higher than the industry average. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Alicanto Minerals Limited's Growth

Over the past three years, Alicanto Minerals Limited has seen its earnings per share (EPS) grow by 11% per year. It saw its revenue drop 48% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Alicanto Minerals Limited Been A Good Investment?

Given the total shareholder loss of 44% over three years, many shareholders in Alicanto Minerals Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

As previously discussed, Peter is compensated close to the median for companies of its size, and which belong to the same industry. At the same time, the company has logged negative shareholder returns over the last three years. But EPS growth is moving in a favorable direction, certainly a positive sign. It's tough for us to say CEO compensation is too generous when EPS growth is positive, but negative investor returns will irk shareholders and reduce any chances of a raise.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 5 warning signs for Alicanto Minerals you should be aware of, and 3 of them don't sit too well with us.

Important note: Alicanto Minerals 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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