Our View On Argonaut Resources' (ASX:ARE) CEO Pay

Simply Wall St
·3-min read

Lindsay Owler is the CEO of Argonaut Resources NL (ASX:ARE), and in this article, we analyze the executive's compensation package with respect to the overall performance of the company. This analysis will also assess whether Argonaut Resources pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Argonaut Resources

How Does Total Compensation For Lindsay Owler Compare With Other Companies In The Industry?

Our data indicates that Argonaut Resources NL has a market capitalization of AU$20m, and total annual CEO compensation was reported as AU$651k for the year to June 2020. That's a notable decrease of 8.8% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at AU$306k.

In comparison with other companies in the industry with market capitalizations under AU$279m, the reported median total CEO compensation was AU$303k. Hence, we can conclude that Lindsay Owler is remunerated higher than the industry median.

Component

2020

2019

Proportion (2020)

Salary

AU$306k

AU$350k

47%

Other

AU$344k

AU$363k

53%

Total Compensation

AU$651k

AU$713k

100%

Talking in terms of the industry, salary represented approximately 69% of total compensation out of all the companies we analyzed, while other remuneration made up 31% of the pie. Argonaut Resources sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
ceo-compensation

Argonaut Resources NL's Growth

Argonaut Resources NL has seen its earnings per share (EPS) increase by 39% a year over the past three years. It saw its revenue drop 83% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. 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 Argonaut Resources NL Been A Good Investment?

Given the total shareholder loss of 43% over three years, many shareholders in Argonaut Resources NL are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

As we touched on above, Argonaut Resources NL is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, the EPS growth is certainly impressive, but shareholder returns — over the same period — have been disappointing. Considering overall performance, we can't say Lindsay is underpaid, in fact compensation is definitely on the higher side.

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. That's why we did our research, and identified 5 warning signs for Argonaut Resources (of which 3 don't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.

Important note: Argonaut Resources is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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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