Chatham Rock Phosphate Limited's (NZSE:CRP) CEO Compensation Looks Acceptable To Us And Here's Why

Performance at Chatham Rock Phosphate Limited (NZSE:CRP) has been rather uninspiring recently and shareholders may be wondering how CEO Chris Castle plans to fix this. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 16 November 2021. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. In our opinion, CEO compensation does not look excessive and we discuss why.

Check out our latest analysis for Chatham Rock Phosphate

Comparing Chatham Rock Phosphate Limited's CEO Compensation With the industry

Our data indicates that Chatham Rock Phosphate Limited has a market capitalization of NZ$9.5m, and total annual CEO compensation was reported as CA$64k for the year to March 2021. We note that's a decrease of 49% compared to last year. It is worth noting that the CEO compensation consists entirely of the salary, worth CA$64k.

For comparison, other companies in the industry with market capitalizations below NZ$279m, reported a median total CEO compensation of CA$385k. That is to say, Chris Castle is paid under the industry median. What's more, Chris Castle holds NZ$91k worth of shares in the company in their own name.

Component	2021	2020	Proportion (2021)
Salary	CA$64k	CA$124k	100%
Other	-	-	-
Total Compensation	CA$64k	CA$124k	100%

On an industry level, around 66% of total compensation represents salary and 34% is other remuneration. Speaking on a company level, Chatham Rock Phosphate prefers to tread along a traditional path, disbursing all compensation through a salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Chatham Rock Phosphate Limited's Growth Numbers

Chatham Rock Phosphate Limited has seen its earnings per share (EPS) increase by 46% a year over the past three years. It achieved revenue growth of 6.6% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Chatham Rock Phosphate Limited Been A Good Investment?

Since shareholders would have lost about 26% over three years, some Chatham Rock Phosphate Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Chatham Rock Phosphate pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. The loss to shareholders over the past three years is certainly concerning. This contrasts to the strong EPS growth recently however, and suggests that there may be other factors at play driving down the share price. A key focus for the board and management will be how to align the share price with fundamentals. The upcoming AGM will provide shareholders the opportunity to raise their concerns and evaluate if the board’s judgement and decision-making is aligned with their expectations.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 2 warning signs for Chatham Rock Phosphate that investors should look into moving forward.

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.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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