Chris Ringrose became the CEO of Cullen Resources Limited (ASX:CUL) in 2006, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether Cullen Resources pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Check out our latest analysis for Cullen Resources
How Does Total Compensation For Chris Ringrose Compare With Other Companies In The Industry?
At the time of writing, our data shows that Cullen Resources Limited has a market capitalization of AU$7.2m, and reported total annual CEO compensation of AU$206k for the year to June 2020. That's mostly flat as compared to the prior year's compensation. In particular, the salary of AU$180.0k, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the industry with market capitalizations under AU$259m, the reported median total CEO compensation was AU$308k. In other words, Cullen Resources pays its CEO lower than the industry median. Furthermore, Chris Ringrose directly owns AU$89k worth of shares in the company.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | AU$180k | AU$180k | 87% |
| Other | AU$26k | AU$26k | 13% |
| Total Compensation | AU$206k | AU$206k | 100% |
Talking in terms of the industry, salary represented approximately 69% of total compensation out of all the companies we analyzed, while other remuneration made up 31% of the pie. Cullen Resources pays out 87% of remuneration in the form of a salary, significantly higher than the industry average. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
A Look at Cullen Resources Limited's Growth Numbers
Cullen Resources Limited has seen its earnings per share (EPS) increase by 25% a year over the past three years. Its revenue is up 1,657% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Cullen Resources Limited Been A Good Investment?
Since shareholders would have lost about 54% over three years, some Cullen Resources Limited investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
As previously discussed, Chris is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. However we must not forget that the EPS growth has been very strong over three years. It's tough to criticize CEO compensation when the per-share EPS movement is positive. But shareholders will likely want to hold off on any raise for Chris until investor returns are positive.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 5 warning signs (and 4 which don't sit too well with us) in Cullen Resources we think you should know about.
Switching gears from Cullen Resources, 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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About ASX:CUL
Cullen Resources
Engages in the mineral exploration activities in Western Australia and Finland.
Excellent balance sheet moderate.
