It's Unlikely That The CEO Of Pacific Nickel Mines Limited (ASX:PNM) Will See A Huge Pay Rise This Year

In the past three years, the share price of Pacific Nickel Mines Limited (ASX:PNM) has struggled to grow and now shareholders are sitting on a loss. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. The AGM coming up on the 26 November 2021 could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

View our latest analysis for Pacific Nickel Mines

How Does Total Compensation For Geoff Hiller Compare With Other Companies In The Industry?

According to our data, Pacific Nickel Mines Limited has a market capitalization of AU$28m, and paid its CEO total annual compensation worth AU$269k over the year to June 2021. Notably, that's an increase of 34% over the year before. Notably, the salary which is AU$249.7k, represents most of the total compensation being paid.

On comparing similar-sized companies in the industry with market capitalizations below AU$275m, we found that the median total CEO compensation was AU$352k. So it looks like Pacific Nickel Mines compensates Geoff Hiller in line with the median for the industry. Moreover, Geoff Hiller also holds AU$850k worth of Pacific Nickel Mines stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2021	2020	Proportion (2021)
Salary	AU$250k	AU$171k	93%
Other	AU$19k	AU$29k	7%
Total Compensation	AU$269k	AU$200k	100%

On an industry level, around 59% of total compensation represents salary and 41% is other remuneration. Pacific Nickel Mines pays out 93% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Pacific Nickel Mines Limited's Growth Numbers

Over the past three years, Pacific Nickel Mines Limited has seen its earnings per share (EPS) grow by 47% per year. Its revenue is down 70% over the previous year.

This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Pacific Nickel Mines Limited Been A Good Investment?

Few Pacific Nickel Mines Limited shareholders would feel satisfied with the return of -65% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 6 warning signs for Pacific Nickel Mines (of which 4 are concerning!) that you should know about in order to have a holistic understanding of the stock.

Important note: Pacific Nickel Mines 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.

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.

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