Is Centamin plc’s (LON:CEY) CEO Pay Justified?

Andrew Pardey became the CEO of Centamin plc (LON:CEY) in 2015. 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 – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out 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£1.2b, and pays its CEO total annual compensation worth US$3m. We note that’s an increase of 45% above last year. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO compensation was US$2m.

Thus we can conclude that Andrew Pardey receives more in total compensation than the median of a group of companies in the same market, and of similar size to Centamin plc. However, this doesn’t necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

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

LSE:CEY CEO Compensation October 15th 18
LSE:CEY CEO Compensation October 15th 18

Is Centamin plc Growing?

On average over the last three years, Centamin plc has grown earnings per share (EPS) by 14% each year. In the last year, its revenue is up 4.4%.

This shows that the company has improved itself over the last few years. Good news for shareholders. It’s good to see a bit of revenue growth, as this suggests the business is able to grow sustainably.

You might want to check this free visual report on analyst forecasts for future earnings.

Has Centamin plc Been A Good Investment?

I think that the total shareholder return of 77%, over three years, would leave most Centamin plc shareholders smiling. So they may not be at all concerned if the CEO is paid more than is normal for companies around the same size.

In Summary…

We compared total CEO remuneration at Centamin plc with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. In addition, shareholders have done well over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Centamin plc (free visualization of insider trades).

Or you might prefer gaze upon this detailed graph of past earnings, revenue and cash flow .

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.