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Is Premier African Minerals Limited's (LON:PREM) CEO Being Overpaid?

Simply Wall St

George Roach is the CEO of Premier African Minerals Limited (LON:PREM). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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.

Check out our latest analysis for Premier African Minerals

How Does George Roach's Compensation Compare With Similar Sized Companies?

According to our data, Premier African Minerals Limited has a market capitalization of UK£12m, and paid its CEO total annual compensation worth US$240k over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at . Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$320k.

That means George Roach receives fairly typical remuneration for the CEO of a company that size. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

You can see, below, how CEO compensation at Premier African Minerals has changed over time.

AIM:PREM CEO Compensation, November 7th 2019

Is Premier African Minerals Limited Growing?

Premier African Minerals Limited has increased its earnings per share (EPS) by an average of 35% a year, over the last three years (using a line of best fit). In the last year, the company lost virtually all of its revenue.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Premier African Minerals Limited Been A Good Investment?

Since shareholders would have lost about 68% over three years, some Premier African Minerals Limited shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

George Roach is paid around what is normal the leaders of comparable size companies.

We like that the company is growing EPS, but it's disappointing to see negative shareholder returns over three years. Considering the improvement in earnings per share, one could argue that the CEO pay is appropriate, albeit not too low. So you may want to check if insiders are buying Premier African Minerals shares with their own money (free access).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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.