Should You Worry About Carpentaria Resources Limited’s (ASX:CAP) CEO Pay Cheque?

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Quentin Hill became the CEO of Carpentaria Resources Limited (ASX:CAP) in 2013. First, this article will compare CEO compensation with compensation at similar sized companies. 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 method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Carpentaria Resources

How Does Quentin Hill’s Compensation Compare With Similar Sized Companies?

Our data indicates that Carpentaria Resources Limited is worth AU$13m, and total annual CEO compensation is AU$367k. (This is based on the year to June 2018). While we always look at total compensation first, we note that the salary component is less, at AU$278k. We looked at a group of companies with market capitalizations under AU$285m, and the median CEO total compensation was AU$354k.

That means Quentin Hill 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 Carpentaria Resources, below.

ASX:CAP CEO Compensation, May 7th 2019
ASX:CAP CEO Compensation, May 7th 2019

Is Carpentaria Resources Limited Growing?

Carpentaria Resources Limited has increased its earnings per share (EPS) by an average of 40% a year, over the last three years (using a line of best fit). In the last year, its revenue is down -169%.

This demonstrates that the company has been improving recently. A good result. While it would be good to see revenue growth, profits matter more in the end. Although we don’t have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Carpentaria Resources Limited Been A Good Investment?

Given the total loss of 5.5% over three years, many shareholders in Carpentaria Resources Limited are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.

In Summary…

Quentin Hill is paid around what is normal the leaders of comparable size companies.

We think that the EPS growth is very pleasing, but we cannot say the same about the lacklustre shareholder returns (over the last three years). We’d be surprised if shareholders want to see a pay rise for the CEO, but we’d stop short of calling their pay too generous. Shareholders may want to check for free if Carpentaria Resources insiders are buying or selling shares.

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.