A Quick Analysis On Hummingbird Resources' (LON:HUM) CEO Salary

Dan Betts is the CEO of Hummingbird Resources PLC (LON:HUM), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also assess whether Hummingbird Resources pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Hummingbird Resources

Comparing Hummingbird Resources PLC's CEO Compensation With the industry

Our data indicates that Hummingbird Resources PLC has a market capitalization of UK£108m, and total annual CEO compensation was reported as US$742k for the year to December 2019. We note that's an increase of 21% above last year. In particular, the salary of US$473.0k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the industry with market capitalizations below UK£149m, we found that the median total CEO compensation was US$202k. Accordingly, our analysis reveals that Hummingbird Resources PLC pays Dan Betts north of the industry median. Furthermore, Dan Betts directly owns UK£1.4m worth of shares in the company.

On an industry level, around 69% of total compensation represents salary and 31% is other remuneration. Our data reveals that Hummingbird Resources allocates salary more or less in line with the wider market. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Hummingbird Resources PLC's Growth

Hummingbird Resources PLC has seen its earnings per share (EPS) increase by 75% a year over the past three years. It achieved revenue growth of 55% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Hummingbird Resources PLC Been A Good Investment?

Since shareholders would have lost about 12% over three years, some Hummingbird Resources PLC investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As we touched on above, Hummingbird Resources PLC is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But the company has impressed with its EPS growth, but shareholder returns — over the same period — have been disappointing. Although we don't think the CEO pay is too high, considering negative investor returns, it is more generous than modest.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 1 warning sign for Hummingbird Resources that investors should be aware of in a dynamic business environment.

Important note: Hummingbird Resources 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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