How Does Nexus Minerals' (ASX:NXM) CEO Salary Compare to Peers?

This article will reflect on the compensation paid to Andy Tudor who has served as CEO of Nexus Minerals Limited (ASX:NXM) since 2014. This analysis will also assess whether Nexus Minerals pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Nexus Minerals

How Does Total Compensation For Andy Tudor Compare With Other Companies In The Industry?

At the time of writing, our data shows that Nexus Minerals Limited has a market capitalization of AU$24m, and reported total annual CEO compensation of AU$315k for the year to June 2020. That's a modest increase of 5.1% on the prior year. We note that the salary portion, which stands at AU$251.1k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under AU$258m, the reported median total CEO compensation was AU$311k. This suggests that Nexus Minerals remunerates its CEO largely in line with the industry average. Moreover, Andy Tudor also holds AU$160k worth of Nexus Minerals stock directly under their own name.

Talking in terms of the industry, salary represented approximately 68% of total compensation out of all the companies we analyzed, while other remuneration made up 32% of the pie. Nexus Minerals is paying a higher share of its remuneration through a salary in comparison to the overall 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.

Nexus Minerals Limited's Growth

Nexus Minerals Limited's earnings per share (EPS) grew 23% per year over the last three years. The trailing twelve months of revenue was pretty much the same as the prior period.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Nexus Minerals Limited Been A Good Investment?

Given the total shareholder loss of 11% over three years, many shareholders in Nexus Minerals Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

As we noted earlier, Nexus Minerals pays its CEO in line with similar-sized companies belonging to the same industry. On the other hand, the company has logged negative shareholder returns over the previous three years. However, EPS growth is positive over the same time frame. 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.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 6 warning signs for Nexus Minerals you should be aware of, and 3 of them make us uncomfortable.

Important note: Nexus 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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