In This Article:
In 2015 Honglin Zhao was appointed CEO of Grange Resources Limited (ASX:GRR). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. 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.
Check out our latest analysis for Grange Resources
How Does Honglin Zhao's Compensation Compare With Similar Sized Companies?
According to our data, Grange Resources Limited has a market capitalization of AU$272m, and paid its CEO total annual compensation worth AU$810k over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at AU$495k. We examined companies with market caps from AU$148m to AU$591m, and discovered that the median CEO total compensation of that group was AU$711k.
That means Honglin Zhao receives fairly typical remuneration for the CEO of a company that size. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.
The graphic below shows how CEO compensation at Grange Resources has changed from year to year.
Is Grange Resources Limited Growing?
Over the last three years Grange Resources Limited has grown its earnings per share (EPS) by an average of 56% per year (using a line of best fit). In the last year, its revenue is down 2.4%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Grange Resources Limited Been A Good Investment?
Most shareholders would probably be pleased with Grange Resources Limited for providing a total return of 162% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
Honglin Zhao is paid around what is normal the leaders of comparable size companies.
Few would be critical of the leadership, since returns have been juicy and earnings per share are moving in the right direction. Although the pay is a normal amount, some shareholders probably consider it fair or modest, given the good performance of the stock. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Grange Resources.