What Can We Make Of Kairos Minerals' (ASX:KAI) CEO Compensation?

Terry Topping became the CEO of Kairos Minerals Limited (ASX:KAI) in 2017, 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 look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Kairos Minerals.

View our latest analysis for Kairos Minerals

Comparing Kairos Minerals Limited's CEO Compensation With the industry

At the time of writing, our data shows that Kairos Minerals Limited has a market capitalization of AU$57m, and reported total annual CEO compensation of AU$318k for the year to June 2020. That's mostly flat as compared to the prior year's compensation. We note that the salary portion, which stands at AU$290.0k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the industry with market capitalizations below AU$259m, we found that the median total CEO compensation was AU$307k. This suggests that Kairos Minerals remunerates its CEO largely in line with the industry average. Moreover, Terry Topping also holds AU$145k worth of Kairos Minerals stock directly under their own name.

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. It's interesting to note that Kairos Minerals pays out a greater portion of remuneration through salary, compared to the industry. 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.

Kairos Minerals Limited's Growth

Kairos Minerals Limited's earnings per share (EPS) grew 11% per year over the last three years. In the last year, its revenue is up 301%.

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. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Kairos Minerals Limited Been A Good Investment?

With a three year total loss of 16% for the shareholders, Kairos Minerals Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As previously discussed, Terry is compensated close to the median for companies of its size, and which belong to the same industry. On the other hand, the company has logged negative shareholder returns over the previous three years. But EPS growth is moving in a favorable direction, certainly a positive sign. It's tough for us to say CEO compensation is too generous when EPS growth is positive, but negative investor returns will irk shareholders and reduce any chances of a raise.

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 5 warning signs for Kairos Minerals (3 are a bit unpleasant!) that you should be aware of before investing here.

Important note: Kairos Minerals 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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