How Is Stavely Minerals' (ASX:SVY) CEO Compensated?

Chris Cairns became the CEO of Stavely Minerals Limited (ASX:SVY) in 2006, 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 look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Stavely Minerals.

Check out our latest analysis for Stavely Minerals

How Does Total Compensation For Chris Cairns Compare With Other Companies In The Industry?

At the time of writing, our data shows that Stavely Minerals Limited has a market capitalization of AU$204m, and reported total annual CEO compensation of AU$785k for the year to June 2020. That's a notable increase of 78% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at AU$380k.

In comparison with other companies in the industry with market capitalizations ranging from AU$129m to AU$514m, the reported median CEO total compensation was AU$514k. Accordingly, our analysis reveals that Stavely Minerals Limited pays Chris Cairns north of the industry median. Furthermore, Chris Cairns directly owns AU$6.3m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, roughly 68% of total compensation represents salary and 32% is other remuneration. Stavely Minerals pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Stavely Minerals Limited's Growth

Over the last three years, Stavely Minerals Limited has shrunk its earnings per share by 22% per year. In the last year, its revenue is down 9.2%.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Stavely Minerals Limited Been A Good Investment?

Boasting a total shareholder return of 133% over three years, Stavely Minerals Limited has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

As previously discussed, Chris is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. We're not seeing great strides in EPS, but the company has clearly pleased some investors, given the returns over the last three years. So while we would not say that Chris is generously paid, stockholders would want to see some EPS growth before agreeing that a raise is a good idea.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We did our research and identified 4 warning signs (and 2 which are concerning) in Stavely 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.

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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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