This article will reflect on the compensation paid to Tim McManus who has served as CEO of Bass Metals Limited (ASX:BSM) since 2016. 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 Bass Metals
Comparing Bass Metals Limited's CEO Compensation With the industry
At the time of writing, our data shows that Bass Metals Limited has a market capitalization of AU$12m, and reported total annual CEO compensation of AU$304k for the year to June 2020. Notably, that's a decrease of 14% over the year before. In particular, the salary of AU$277.5k, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the industry with market capitalizations under AU$285m, the reported median total CEO compensation was AU$314k. So it looks like Bass Metals compensates Tim McManus in line with the median for the industry.
Component | 2020 | 2019 | Proportion (2020) |
Salary | AU$278k | AU$305k | 91% |
Other | AU$26k | AU$48k | 9% |
Total Compensation | AU$304k | AU$353k | 100% |
On an industry level, around 70% of total compensation represents salary and 30% is other remuneration. It's interesting to note that Bass Metals pays out a greater portion of remuneration through salary, compared to the industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
A Look at Bass Metals Limited's Growth Numbers
Over the past three years, Bass Metals Limited has seen its earnings per share (EPS) grow by 25% per year. In the last year, its revenue is up 6.8%.
This demonstrates that the company has been improving recently and is good news for the shareholders. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Bass Metals Limited Been A Good Investment?
Given the total shareholder loss of 89% over three years, many shareholders in Bass Metals Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.
To Conclude...
As previously discussed, Tim is compensated close to the median for companies of its size, and which belong to the same industry. On the other hand, the company has logged negative shareholder returns over the previous three years. However, EPS growth is positive over the same time frame. Considering positive EPS growth, we'd say compensation is fair, but shareholders may be wary of a bump in pay before the company logs positive returns.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 6 warning signs (and 4 which are significant) in Bass Metals we think you should know about.
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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