How Does Metro Mining's (ASX:MMI) CEO Pay Compare With Company Performance?

Simon Finnis became the CEO of Metro Mining Limited (ASX:MMI) in 2015, 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 evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Metro Mining

How Does Total Compensation For Simon Finnis Compare With Other Companies In The Industry?

At the time of writing, our data shows that Metro Mining Limited has a market capitalization of AU$92m, and reported total annual CEO compensation of AU$572k for the year to December 2019. This means that the compensation hasn't changed much from last year. We note that the salary portion, which stands at AU$435.0k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the industry with market capitalizations below AU$273m, we found that the median total CEO compensation was AU$309k. Hence, we can conclude that Simon Finnis is remunerated higher than the industry median. Furthermore, Simon Finnis directly owns AU$282k worth of shares in the company.

On an industry level, around 70% of total compensation represents salary and 30% is other remuneration. Metro Mining is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. 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 Metro Mining Limited's Growth Numbers

Metro Mining Limited has seen its earnings per share (EPS) increase by 86% a year over the past three years. In the last year, its revenue is up 53%.

This demonstrates that the company has been improving recently and is good news for the shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Metro Mining Limited Been A Good Investment?

With a three year total loss of 73% for the shareholders, Metro Mining Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

As we touched on above, Metro Mining Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, the EPS growth is certainly impressive, but shareholder returns — over the same period — have been disappointing. Although we'd stop short of calling it inappropriate, we think Simon is earning a very handsome sum.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for Metro Mining that investors should think about before committing capital to this stock.

Switching gears from Metro Mining, 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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