Matthew Greentree became the CEO of Ausgold Limited (ASX:AUC) in 2017, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
View our latest analysis for Ausgold
Comparing Ausgold Limited's CEO Compensation With the industry
At the time of writing, our data shows that Ausgold Limited has a market capitalization of AU$61m, and reported total annual CEO compensation of AU$306k for the year to June 2020. That is, the compensation was roughly the same as last year. In particular, the salary of AU$192.4k, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the industry with market capitalizations under AU$259m, the reported median total CEO compensation was AU$308k. From this we gather that Matthew Greentree is paid around the median for CEOs in the industry. Moreover, Matthew Greentree also holds AU$165k worth of Ausgold stock directly under their own name.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | AU$192k | AU$192k | 63% |
| Other | AU$114k | AU$121k | 37% |
| Total Compensation | AU$306k | AU$313k | 100% |
On an industry level, around 69% of total compensation represents salary and 31% is other remuneration. Our data reveals that Ausgold allocates salary more or less in line with the wider market. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at Ausgold Limited's Growth Numbers
Ausgold Limited has seen its earnings per share (EPS) increase by 46% a year over the past three years. Its revenue is down 86% over the previous year.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Ausgold Limited Been A Good Investment?
Ausgold Limited has generated a total shareholder return of 24% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
To Conclude...
As we touched on above, Ausgold 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. But EPS growth over the last three years has been impressive, although the same cannot be said for shareholder returns. Considering overall performance, we'd say the compensation is fair, although stockholders will want to see higher returns moving forward.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 4 warning signs (and 1 which is concerning) in Ausgold 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:AUC
Excellent balance sheet slight.
