Yahoo Finance Is Dart Mining NL's (ASX:DTM) CEO Pay Justified?
James Chirnside became the CEO of Dart Mining NL (ASX:DTM) 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 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.
See our latest analysis for Dart Mining
How Does James Chirnside's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Dart Mining NL has a market cap of AU$3.5m, and reported total annual CEO compensation of AU$197k for the year to June 2019. We think total compensation is more important but we note that the CEO salary is lower, at AU$180k. We examined a group of similar sized companies, with market capitalizations of below AU$306m. The median CEO total compensation in that group is AU$383k.
Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Dart Mining. Speaking on an industry level, we can see that nearly 70% of total compensation represents salary, while the remainder of 30% is other remuneration. It's interesting to note that Dart Mining pays out a greater portion of remuneration through salary, in comparison to the wider industry.
At first glance this seems like a real positive for shareholders, since James Chirnside is paid less than the average total compensation paid by similar sized companies. However, before we heap on the praise, we should delve deeper to understand business performance. The graphic below shows how CEO compensation at Dart Mining has changed from year to year.
Is Dart Mining NL Growing?
On average over the last three years, Dart Mining NL has seen earnings per share (EPS) move in a favourable direction by 32% each year (using a line of best fit). In the last year, its revenue is up 679%.
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. Although we don't have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Dart Mining NL Been A Good Investment?
Since shareholders would have lost about 54% over three years, some Dart Mining NL shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary...
Dart Mining NL is currently paying its CEO below what is normal for companies of its size.
Many would consider this to indicate that the pay is modest since the business is growing. Few would deny that the total shareholder return over the last three years could have been a lot better. So while we would not say that James Chirnside is generously paid, it would be good to see an improvement in business performance before too an increase in pay. When I see fairly low remuneration, combined with earnings per share growth, but without big share price gains, it makes me want to research the potential for future gains. On another note, Dart Mining has 4 warning signs (and 2 which are potentially serious) we think you should know about.
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.
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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. Thank you for reading.
