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Is SIMEC Atlantis Energy Limited (LON:SAE) Overpaying Its CEO?

In 2006, Tim Cornelius was appointed CEO of SIMEC Atlantis Energy Limited (LON:SAE). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for SIMEC Atlantis Energy

How Does Tim Cornelius's Compensation Compare With Similar Sized Companies?

According to our data, SIMEC Atlantis Energy Limited has a market capitalization of UK£31m, and paid its CEO total annual compensation worth UK£434k over the year to December 2018. We examined a group of similar sized companies, with market capitalizations of below UK£161m. The median CEO total compensation in that group is UK£266k.

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Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where SIMEC Atlantis Energy stands. On an industry level, roughly 59% of total compensation represents salary and 41% is other remuneration. When we boil it down to the company level, SIMEC Atlantis Energy prefers to reward Tim Cornelius through non-salary compensation, since it does not pay a salary.

It would therefore appear that SIMEC Atlantis Energy Limited pays Tim Cornelius more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous. You can see a visual representation of the CEO compensation at SIMEC Atlantis Energy, below.

AIM:SAE CEO Compensation April 29th 2020
AIM:SAE CEO Compensation April 29th 2020

Is SIMEC Atlantis Energy Limited Growing?

Over the last three years SIMEC Atlantis Energy Limited has shrunk its earnings per share by an average of 32% per year (measured with a line of best fit). In the last year, its revenue is up 1567%.

Investors should note that, over three years, earnings per share are down. On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. You might want to check this free visual report on analyst forecasts for future earnings.

Has SIMEC Atlantis Energy Limited Been A Good Investment?

Given the total loss of 86% over three years, many shareholders in SIMEC Atlantis Energy Limited are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

We examined the amount SIMEC Atlantis Energy Limited pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

While we have not been overly impressed by the business performance, the shareholder returns, over three years, have been disappointing. Considering this, we have the opinion that the CEO pay is more on the generous side, than the modest side. Taking a breather from CEO compensation, we've spotted 6 warning signs for SIMEC Atlantis Energy (of which 1 is potentially serious!) you should know about in order to have a holistic understanding of the stock.

If you want to buy a stock that is better than SIMEC Atlantis Energy, this free list of high return, low debt companies is a great place to look.

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.

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. Thank you for reading.