Here's Why It's Unlikely That Beacon Minerals Limited's (ASX:BCN) CEO Will See A Pay Rise This Year

Key Insights

• Beacon Minerals will host its Annual General Meeting on 27th of November
• CEO Graham McGarry's total compensation includes salary of AU$300.0k
• The total compensation is similar to the average for the industry
• Beacon Minerals' three-year loss to shareholders was 7.3% while its EPS was down 41% over the past three years

Beacon Minerals Limited (ASX:BCN) has not performed well recently and CEO Graham McGarry will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 27th of November. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. We present the case why we think CEO compensation is out of sync with company performance.

View our latest analysis for Beacon Minerals

How Does Total Compensation For Graham McGarry Compare With Other Companies In The Industry?

At the time of writing, our data shows that Beacon Minerals Limited has a market capitalization of AU$101m, and reported total annual CEO compensation of AU$332k for the year to June 2023. We note that's an increase of 21% above last year. We note that the salary portion, which stands at AU$300.0k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Australian Metals and Mining industry with market capitalizations below AU$305m, reported a median total CEO compensation of AU$386k. From this we gather that Graham McGarry is paid around the median for CEOs in the industry. What's more, Graham McGarry holds AU$11m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2023	2022	Proportion (2023)
Salary	AU$300k	AU$250k	90%
Other	AU$32k	AU$25k	10%
Total Compensation	AU$332k	AU$275k	100%

Talking in terms of the industry, salary represented approximately 61% of total compensation out of all the companies we analyzed, while other remuneration made up 39% of the pie. Beacon Minerals pays out 90% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Beacon Minerals Limited's Growth Numbers

Over the last three years, Beacon Minerals Limited has shrunk its earnings per share by 41% per year. In the last year, its revenue is up 1.6%.

Overall this is not a very positive result for shareholders. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Beacon Minerals Limited Been A Good Investment?

Since shareholders would have lost about 7.3% over three years, some Beacon Minerals Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 3 warning signs for Beacon Minerals that investors should look into moving forward.

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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.