Chris Castle is the CEO of Chatham Rock Phosphate Limited (NZSE:CRP). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Chris Castle's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Chatham Rock Phosphate Limited has a market cap of NZ$3.5m, and reported total annual CEO compensation of CA$158k for the year to March 2019. We think total compensation is more important but we note that the CEO salary is lower, at CA$129k. We examined a group of similar sized companies, with market capitalizations of below CA$266m. The median CEO total compensation in that group is CA$386k.
A first glance this seems like a real positive for shareholders, since Chris Castle is paid less than the average total compensation paid by similar sized companies. Though positive, it's important we delve into the performance of the actual business.
The graphic below shows how CEO compensation at Chatham Rock Phosphate has changed from year to year.
Is Chatham Rock Phosphate Limited Growing?
Over the last three years Chatham Rock Phosphate Limited has grown its earnings per share (EPS) by an average of 12% per year (using a line of best fit). Its revenue is down 26% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Although we don't have analyst forecasts shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Chatham Rock Phosphate Limited Been A Good Investment?
Since shareholders would have lost about 74% over three years, some Chatham Rock Phosphate Limited shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.
Chatham Rock Phosphate Limited is currently paying its CEO below what is normal for companies of its size.
Considering the underlying business is growing earnings, this would suggest the pay is modest. Despite some positives, it is likely that shareholders wanted better returns, given the performance over the last three years. So while we would not say that Chris Castle is generously paid, it would be good to see an improvement in business performance before too an increase in pay. When I see fairly low remuneration, combined with earnings per share growth, but without big share price gains, it makes me want to research the potential for future gains. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Chatham Rock Phosphate.
Important note: Chatham Rock Phosphate may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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