Does Empire Metals' (LON:EEE) CEO Salary Compare Well With The Performance Of The Company?

·3 min read

This article will reflect on the compensation paid to Mike Struthers who has served as CEO of Empire Metals Limited (LON:EEE) since 2018. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Empire Metals

How Does Total Compensation For Mike Struthers Compare With Other Companies In The Industry?

According to our data, Empire Metals Limited has a market capitalization of UK£5.4m, and paid its CEO total annual compensation worth UK£63k over the year to December 2019. That's a notable decrease of 24% on last year. Notably, the salary of UK£63k is the entirety of the CEO compensation.

For comparison, other companies in the industry with market capitalizations below UK£150m, reported a median total CEO compensation of UK£148k. This suggests that Mike Struthers is paid below the industry median.

Component

2019

2018

Proportion (2019)

Salary

UK£63k

UK£67k

100%

Other

-

UK£16k

-

Total Compensation

UK£63k

UK£83k

100%

Speaking on an industry level, nearly 67% of total compensation represents salary, while the remainder of 33% is other remuneration. Speaking on a company level, Empire Metals prefers to tread along a traditional path, disbursing all compensation through a salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

ceo-compensation
ceo-compensation

A Look at Empire Metals Limited's Growth Numbers

Empire Metals Limited has seen its earnings per share (EPS) increase by 31% a year over the past three years. In the last year, its revenue is down 87%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Empire Metals Limited Been A Good Investment?

With a three year total loss of 85% for the shareholders, Empire Metals Limited would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

Empire Metals pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As previously discussed, Mike is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. However we must not forget that the EPS growth has been very strong over three years. Although we would've liked to see positive investor returns, it would be bold of us to criticize CEO compensation when EPS are up. But shareholders will likely want to hold off on any raise for Mike until investor returns are positive.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 6 warning signs for Empire Metals you should be aware of, and 5 of them shouldn't be ignored.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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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