It's Probably Less Likely That Orion Minerals Limited's (ASX:ORN) CEO Will See A Huge Pay Rise This Year

Key Insights

• Orion Minerals will host its Annual General Meeting on 28th of November
• CEO Errol Smart's total compensation includes salary of AU$322.0k
• The overall pay is comparable to the industry average
• Orion Minerals' three-year loss to shareholders was 52% while its EPS grew by 21% over the past three years

Shareholders of Orion Minerals Limited (ASX:ORN) will have been dismayed by the negative share price return over the last three years. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. The AGM coming up on the 28th of November could be an opportunity for shareholders to bring these concerns to the board's attention. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

See our latest analysis for Orion Minerals

How Does Total Compensation For Errol Smart Compare With Other Companies In The Industry?

At the time of writing, our data shows that Orion Minerals Limited has a market capitalization of AU$81m, and reported total annual CEO compensation of AU$405k for the year to June 2023. That's slightly lower by 4.4% over the previous year. We note that the salary portion, which stands at AU$322.0k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the Australian Metals and Mining industry with market capitalizations below AU$305m, we found that the median total CEO compensation was AU$387k. So it looks like Orion Minerals compensates Errol Smart in line with the median for the industry. What's more, Errol Smart holds AU$384k worth of shares in the company in their own name.

Component	2023	2022	Proportion (2023)
Salary	AU$322k	AU$322k	79%
Other	AU$83k	AU$102k	21%
Total Compensation	AU$405k	AU$424k	100%

On an industry level, around 61% of total compensation represents salary and 39% is other remuneration. Orion 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 Orion Minerals Limited's Growth Numbers

Over the past three years, Orion Minerals Limited has seen its earnings per share (EPS) grow by 21% per year. It achieved revenue growth of 29% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Orion Minerals Limited Been A Good Investment?

The return of -52% over three years would not have pleased Orion Minerals Limited shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would be keen to know what's holding the stock back when earnings have grown. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

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 did our research and identified 6 warning signs (and 3 which are a bit unpleasant) in Orion Minerals we think you should know about.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.