Stephen Stone became the CEO of Azumah Resources Limited (ASX:AZM) in 2009. First, this article will compare CEO compensation with compensation at similar sized companies. 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.
See our latest analysis for Azumah Resources
How Does Stephen Stone's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Azumah Resources Limited has a market cap of AU$16m, and is paying total annual CEO compensation of AU$638k. (This figure is for the year to June 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$274k. We took a group of companies with market capitalizations below AU$292m, and calculated the median CEO total compensation to be AU$372k.
It would therefore appear that Azumah Resources Limited pays Stephen Stone 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. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at Azumah Resources has changed from year to year.
Is Azumah Resources Limited Growing?
Azumah Resources Limited has increased its earnings per share (EPS) by an average of 37% a year, over the last three years (using a line of best fit). In the last year, its revenue is up 96%.
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. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Azumah Resources Limited Been A Good Investment?
With a three year total loss of 65%, Azumah Resources Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
We compared the total CEO remuneration paid by Azumah Resources Limited, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Azumah Resources.