Yahoo Finance How Should Investors React To Serabi Gold's (LON:SRB) CEO Pay?
Mike Hodgson became the CEO of Serabi Gold plc (LON:SRB) in 2007, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Serabi Gold.
See our latest analysis for Serabi Gold
Comparing Serabi Gold plc's CEO Compensation With the industry
Our data indicates that Serabi Gold plc has a market capitalization of UK£51m, and total annual CEO compensation was reported as US$407k for the year to December 2019. That's a notable decrease of 13% on last year. Notably, the salary which is US$234.6k, represents most of the total compensation being paid.
On comparing similar-sized companies in the industry with market capitalizations below UK£154m, we found that the median total CEO compensation was US$206k. Accordingly, our analysis reveals that Serabi Gold plc pays Mike Hodgson north of the industry median.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$235k | US$237k | 58% |
Other | US$172k | US$230k | 42% |
Total Compensation | US$407k | US$467k | 100% |
On an industry level, roughly 65% of total compensation represents salary and 35% is other remuneration. It's interesting to note that Serabi Gold allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at Serabi Gold plc's Growth Numbers
Serabi Gold plc has seen its earnings per share (EPS) increase by 15% a year over the past three years. Its revenue is up 27% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Serabi Gold plc Been A Good Investment?
Serabi Gold plc has generated a total shareholder return of 4.8% over three years, so most shareholders wouldn't be too disappointed. But they would probably prefer not to see CEO compensation far in excess of the median.
To Conclude...
As we noted earlier, Serabi Gold pays its CEO higher than the norm for similar-sized companies belonging to the same industry. But the company has impressed us with its EPS growth, over three years. We also think investor returns are steady over the same time period. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn't say CEO compensation problematic.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Serabi Gold that investors should think about before committing capital to this stock.
Switching gears from Serabi Gold, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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