In 2004 Will Robinson was appointed CEO of Encounter Resources Limited (ASX:ENR). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.
View our latest analysis for Encounter Resources
How Does Will Robinson's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Encounter Resources Limited has a market cap of AU$38m, and reported total annual CEO compensation of AU$293k for the year to June 2019. We think total compensation is more important but we note that the CEO salary is lower, at AU$267k. We looked at a group of companies with market capitalizations under AU$289m, and the median CEO total compensation was AU$379k.
So Will Robinson is paid around the average of the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
You can see a visual representation of the CEO compensation at Encounter Resources, below.
Is Encounter Resources Limited Growing?
Encounter Resources Limited has increased its earnings per share (EPS) by an average of 3.4% a year, over the last three years (using a line of best fit). Its revenue is up 279% over last year.
It's great to see that revenue growth is strong. Combined with modest EPS growth, we get a good impression of the company. I wouldn't say this is necessarily top notch growth, but it is certainly promising. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Encounter Resources Limited Been A Good Investment?
Most shareholders would probably be pleased with Encounter Resources Limited for providing a total return of 37% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
Will Robinson is paid around what is normal the leaders of comparable size companies.
While the growth could be better, the shareholder returns are clearly good. So all things considered I'd venture that the CEO pay is appropriate. Whatever your view on compensation, you might want to check if insiders are buying or selling Encounter Resources shares (free trial).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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