Matthew Greentree has been the CEO of Ausgold Limited (ASX:AUC) since 2017, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
How Does Total Compensation For Matthew Greentree Compare With Other Companies In The Industry?
According to our data, Ausgold Limited has a market capitalization of AU$49m, and paid its CEO total annual compensation worth AU$306k over the year to June 2020. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at AU$192.4k constitutes the majority of total compensation received by the CEO.
For comparison, other companies in the industry with market capitalizations below AU$279m, reported a median total CEO compensation of AU$303k. This suggests that Ausgold remunerates its CEO largely in line with the industry average. Furthermore, Matthew Greentree directly owns AU$130k worth of shares in the company.
On an industry level, roughly 69% of total compensation represents salary and 31% is other remuneration. Although there is a difference in how total compensation is set, Ausgold more or less reflects the market in terms of setting the salary. 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
Over the past three years, Ausgold Limited has seen its earnings per share (EPS) grow by 66% per year. It saw its revenue drop 72% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few 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 Ausgold Limited Been A Good Investment?
Ausgold Limited has generated a total shareholder return of 29% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.
As we noted earlier, Ausgold pays its CEO in line with similar-sized companies belonging to the same industry. However, it's admirable that over the last three years, EPS growth for the company has been impressive, though the same can't be said for investor returns. So considering these factors, we think the compensation is probably quite reasonable, but investor returns need a boost moving forward.
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. That's why we did our research, and identified 5 warning signs for Ausgold (of which 2 don't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.
Switching gears from Ausgold, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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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