Ron Heeks has been the CEO of Geopacific Resources Limited (ASX:GPR) since 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Ron Heeks’s Compensation Compare With Similar Sized Companies?
Our data indicates that Geopacific Resources Limited is worth AU$58m, and total annual CEO compensation is AU$380k. (This figure is for the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at AU$330k. We looked at a group of companies with market capitalizations under AU$296m, and the median CEO total compensation was AU$356k.
That means Ron Heeks receives fairly typical remuneration for the CEO of a company that size. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance.
The graphic below shows how CEO compensation at Geopacific Resources has changed from year to year.
Is Geopacific Resources Limited Growing?
On average over the last three years, Geopacific Resources Limited has shrunk earnings per share by 76% each year (measured with a line of best fit). In the last year, its revenue is up 106%.
The reduction in earnings per share, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. These two metric are moving in different directions, so while it’s hard to be confident judging performance, we think the stock is worth watching.
Has Geopacific Resources Limited Been A Good Investment?
Since shareholders would have lost about 55% over three years, some Geopacific Resources Limited shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
Ron Heeks is paid around what is normal the leaders of comparable size companies.
The per share growth could be better, in our view. And we think the shareholder returns – over three years – have been underwhelming. So many would argue that the CEO is certainly not underpaid. Whatever your view on compensation, you might want to check if insiders are buying or selling Geopacific Resources shares (free trial).
Important note: Geopacific Resources may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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If you spot an error that warrants correction, please contact the editor at email@example.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.