How Should Investors React To Atlatsa Resources Corporation’s (TSE:ATL) CEO Pay?

HAROLD Motaung has been the CEO of Atlatsa Resources Corporation (TSE:ATL) since 2011. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Atlatsa Resources

How Does HAROLD Motaung’s Compensation Compare With Similar Sized Companies?

Our data indicates that Atlatsa Resources Corporation is worth CA$27m, and total annual CEO compensation is CA$510k. That’s less than last year. We looked at a group of companies with market capitalizations under CA$264m, and the median CEO compensation was CA$155k.

Thus we can conclude that HAROLD Motaung receives more in total compensation than the median of a group of companies in the same market, and of similar size to Atlatsa Resources Corporation. However, this doesn’t necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see, below, how CEO compensation at Atlatsa Resources has changed over time.

TSX:ATL CEO Compensation November 12th 18
TSX:ATL CEO Compensation November 12th 18

Is Atlatsa Resources Corporation Growing?

On average over the last three years, Atlatsa Resources Corporation has shrunk earnings per share by 7.1% each year. It saw its revenue drop -78% over the last year.

Unfortunately, earnings per share have trended lower over the last three years. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO. Although we don’t have analyst forecasts, you might want to assess this free data-rich visualization of earnings, revenue and cash flow.

Has Atlatsa Resources Corporation Been A Good Investment?

Boasting a total shareholder return of 43% over three years, Atlatsa Resources Corporation has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary…

We compared the total CEO remuneration paid by Atlatsa Resources Corporation, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

Earnings per share have not grown in three years, and the revenue growth fails to impress us.

On the other hand, returns have been good, so the company is doing something right. So on this analysis we’d stop short of criticizing the level of CEO compensation. Sometimes, highly paid CEOs create a lot of value for shareholders. Nonetheless, it could be useful to double-check if insiders have sold shares recently.

But note: Atlatsa Resources may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.