Is Centamin plc’s (LON:CEY) CEO Being Overpaid?

Andrew Pardey has been the CEO of Centamin plc (LON:CEY) since 2015. First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for Centamin

How Does Andrew Pardey’s Compensation Compare With Similar Sized Companies?

According to our data, Centamin plc has a market capitalization of UK£1.4b, and paid its CEO total annual compensation worth US$1.1m over the year to December 2018. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$692k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$1.0b to US$3.2b. The median total CEO compensation was US$1.8m.

Most shareholders would consider it a positive that Andrew Pardey takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.

You can see a visual representation of the CEO compensation at Centamin, below.

LSE:CEY CEO Compensation, September 15th 2019
LSE:CEY CEO Compensation, September 15th 2019

Is Centamin plc Growing?

Centamin plc has reduced its earnings per share by an average of 33% a year, over the last three years (measured with a line of best fit). It saw its revenue drop -12% over the last year.

Sadly for shareholders, earnings per share are actually down, over three years. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn’t really justify a high pay packet for the CEO.

Has Centamin plc Been A Good Investment?

With a total shareholder return of 9.3% over three years, Centamin plc has done okay by shareholders. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary…

It appears that Centamin plc remunerates its CEO below most similar sized companies.

Andrew Pardey is remunerated more modestly than is a normal at similar sized companies. However, the earnings per share are not moving in the right direction, and the returns to shareholders could have been better. There is room for improved company performance, but we don’t see the CEO pay as a big issue here. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Centamin.

Important note: Centamin may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.