Tim McManus has been the CEO of Bass Metals Limited (ASX:BSM) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Bass Metals pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
View our latest analysis for Bass Metals
Comparing Bass Metals Limited's CEO Compensation With the industry
At the time of writing, our data shows that Bass Metals Limited has a market capitalization of AU$24m, and reported total annual CEO compensation of AU$304k for the year to June 2020. Notably, that's a decrease of 14% over the year before. In particular, the salary of AU$277.5k, makes up a huge portion of the total compensation being paid to the CEO.
For comparison, other companies in the industry with market capitalizations below AU$261m, reported a median total CEO compensation of AU$305k. So it looks like Bass Metals compensates Tim McManus in line with the median for the industry. Moreover, Tim McManus also holds AU$128k worth of Bass Metals stock directly under their own name.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | AU$278k | AU$305k | 91% |
| Other | AU$26k | AU$48k | 9% |
| Total Compensation | AU$304k | AU$353k | 100% |
On an industry level, around 69% of total compensation represents salary and 31% is other remuneration. Bass Metals is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Bass Metals Limited's Growth
Bass Metals Limited has seen its earnings per share (EPS) increase by 25% a year over the past three years. It achieved revenue growth of 6.8% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Bass Metals Limited Been A Good Investment?
With a three year total loss of 75% for the shareholders, Bass Metals Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
As we noted earlier, Bass Metals pays its CEO in line with similar-sized companies belonging to the same industry. Meanwhile, shareholder returns paint a sorry picture for the company, finishing in the red over the last three years. However, EPS growth is positive over the same time frame. Considering positive EPS growth, we'd say compensation is fair, but shareholders may be wary of a bump in pay before the company logs positive returns.
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. We identified 6 warning signs for Bass Metals (2 are significant!) that you should be aware of before investing here.
Important note: Bass Metals 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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About ASX:GW1
Greenwing Resources
Engages in the production and sale of mineral concentrates.
Excellent balance sheet slight.
