Anthony McClure has been the CEO of Silver Mines Limited (ASX:SVL) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Silver Mines pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
How Does Total Compensation For Anthony McClure Compare With Other Companies In The Industry?
At the time of writing, our data shows that Silver Mines Limited has a market capitalization of AU$195m, and reported total annual CEO compensation of AU$338k for the year to June 2020. That is, the compensation was roughly the same as last year. In particular, the salary of AU$308.2k, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the industry with market capitalizations under AU$279m, the reported median total CEO compensation was AU$309k. So it looks like Silver Mines compensates Anthony McClure in line with the median for the industry. What's more, Anthony McClure holds AU$5.9m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
On an industry level, roughly 70% of total compensation represents salary and 30% is other remuneration. It's interesting to note that Silver Mines 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.
A Look at Silver Mines Limited's Growth Numbers
Silver Mines Limited's earnings per share (EPS) grew 21% per year over the last three years. In the last year, its revenue is down 7.5%.
Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Silver Mines Limited Been A Good Investment?
Most shareholders would probably be pleased with Silver Mines Limited for providing a total return of 132% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
As we noted earlier, Silver Mines pays its CEO in line with similar-sized companies belonging to the same industry. The company is growing EPS and total shareholder returns have been pleasing. Indeed, many might consider that Anthony is compensated rather modestly, given the solid company performance! In fact, shareholders might even think the CEO deserves a raise as a reward due to the fantastic returns generated.
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 3 warning signs for Silver Mines you should be aware of, and 1 of them is significant.
Important note: Silver 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.
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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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