In 2016 Trangie Johnston was appointed CEO of Broken Hill Prospecting Limited (ASX:BPL). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Trangie Johnston’s Compensation Compare With Similar Sized Companies?
Our data indicates that Broken Hill Prospecting Limited is worth AU$6m, and total annual CEO compensation is AU$285k. We examined a group of similar sized companies, with market capitalizations of below AU$275m. The median CEO compensation in that group is AU$354k.
That means Trangie Johnston receives fairly typical remuneration for the CEO of a company that size. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see a visual representation of the CEO compensation at Broken Hill Prospecting, below.
Is Broken Hill Prospecting Limited Growing?
Over the last three years Broken Hill Prospecting Limited has shrunk its earnings per share by an average of 15% per year. Its revenue is down -85% over last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO.
We don’t have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Broken Hill Prospecting Limited Been A Good Investment?
With a total shareholder return of 26% over three years, Broken Hill Prospecting Limited shareholders would, in general, be reasonably content. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
Trangie Johnston is paid around the same as most CEOs of similar size companies.
The company isn’t growing earnings per share, and nor have the total returns inspired us. We wouldn’t say the CEO pay is too high, but we’d venture the company should look to improve its business metrics (and share price) before paying any more. Whatever your view on compensation, you might want to check if insiders are buying or selling Broken Hill Prospecting Limited shares (free trial).
Or you might prefer examine intently this intuitive graph showing past earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.