The CEO of TNG Limited (ASX:TNG) is Paul Burton, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
View our latest analysis for TNG
How Does Total Compensation For Paul Burton Compare With Other Companies In The Industry?
At the time of writing, our data shows that TNG Limited has a market capitalization of AU$121m, and reported total annual CEO compensation of AU$601k for the year to June 2020. That's a notable increase of 15% on last year. We note that the salary portion, which stands at AU$505.3k constitutes the majority of total compensation received by the CEO.
On comparing similar-sized companies in the industry with market capitalizations below AU$259m, we found that the median total CEO compensation was AU$308k. Accordingly, our analysis reveals that TNG Limited pays Paul Burton north of the industry median. Furthermore, Paul Burton directly owns AU$769k worth of shares in the company.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | AU$505k | AU$521k | 84% |
| Other | AU$95k | - | 16% |
| Total Compensation | AU$601k | AU$521k | 100% |
On an industry level, roughly 69% of total compensation represents salary and 31% is other remuneration. TNG pays out 84% of remuneration in the form of a salary, significantly higher than the industry average. 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 TNG Limited's Growth Numbers
TNG Limited's earnings per share (EPS) grew 23% per year over the last three years. Its revenue is down 63% over the previous year.
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. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has TNG Limited Been A Good Investment?
With a three year total loss of 34% for the shareholders, TNG Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
As previously discussed, Paul is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. But the company has impressed with its EPS growth, but it's disappointing to see negative shareholder returns over the same period. Considering overall performance, we can't say Paul is underpaid, in fact compensation is definitely on the higher side.
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. That's why we did our research, and identified 4 warning signs for TNG (of which 1 is a bit unpleasant!) that you should know about in order to have a holistic understanding of the stock.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.
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Access Free AnalysisThis 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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About ASX:TVN
Tivan
Engages in the exploration, evaluation, and development of mineral properties in Australia.
Adequate balance sheet slight.
