Yahoo Finance Is Metro Mining Limited's (ASX:MMI) CEO Overpaid Relative To Its Peers?
In 2015, Simon Finnis was appointed CEO of Metro Mining Limited (ASX:MMI). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for Metro Mining
How Does Simon Finnis's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Metro Mining Limited has a market cap of AU$136m, and reported total annual CEO compensation of AU$572k for the year to December 2019. We think total compensation is more important but we note that the CEO salary is lower, at AU$435k. 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$389k.
Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Metro Mining. On an industry level, roughly 69% of total compensation represents salary and 31% is other remuneration. So it seems like there isn't a significant difference between Metro Mining and the broader market, in terms of salary allocation in the overall compensation package.
As you can see, Simon Finnis is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Metro Mining Limited is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance. The graphic below shows how CEO compensation at Metro Mining has changed from year to year.
Is Metro Mining Limited Growing?
Metro Mining Limited has seen earnings per share (EPS) move positively by an average of 71% a year, over the last three years (using a line of best fit). Its revenue is up 68% over last year.
This demonstrates that the company has been improving recently. A good result. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. Shareholders might be interested in this free visualization of analyst forecasts.
Has Metro Mining Limited Been A Good Investment?
Given the total loss of 27% over three years, many shareholders in Metro Mining Limited are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
We examined the amount Metro Mining 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.
However, the earnings per share growth over three years is certainly impressive. Having said that, shareholders may be disappointed with the weak returns over the last three years. While EPS is moving in the right direction, we'd say shareholders would want better returns before the CEO is paid much more. Moving away from CEO compensation for the moment, we've identified 3 warning signs for Metro Mining that you should be aware of before investing.
If you want to buy a stock that is better than Metro Mining, 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.
