Increases to Focus Minerals Limited's (ASX:FML) CEO Compensation Might Cool off for now

CEO Zhaoya Wang has done a decent job of delivering relatively good performance at Focus Minerals Limited (ASX:FML) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 28 May 2021. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for Focus Minerals

Comparing Focus Minerals Limited's CEO Compensation With the industry

Our data indicates that Focus Minerals Limited has a market capitalization of AU$53m, and total annual CEO compensation was reported as AU$513k for the year to December 2020. This means that the compensation hasn't changed much from last year. We note that the salary portion, which stands at AU$420.0k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the industry with market capitalizations below AU$257m, we found that the median total CEO compensation was AU$303k. This suggests that Zhaoya Wang is paid more than the median for the industry.

Component	2020	2019	Proportion (2020)
Salary	AU$420k	AU$420k	82%
Other	AU$93k	AU$94k	18%
Total Compensation	AU$513k	AU$514k	100%

On an industry level, around 69% of total compensation represents salary and 31% is other remuneration. Focus Minerals 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.

A Look at Focus Minerals Limited's Growth Numbers

Focus Minerals Limited's earnings per share (EPS) grew 6.2% per year over the last three years. It saw its revenue drop 90% over the last year.

We would prefer it if there was revenue growth, but the modest improvement in EPS is good. It's hard to reach a conclusion about business performance right now. This may be one to watch. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Focus Minerals Limited Been A Good Investment?

Focus Minerals Limited has not done too badly by shareholders, with a total return of 5.4%, over three years. It would be nice to see that metric improve in the future. In light of that, investors might probably want to see an improvement on their returns before they feel generous about increasing the CEO remuneration.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 4 warning signs for Focus Minerals you should be aware of, and 2 of them are concerning.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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