Alwyn Vorster became the CEO of BCI Minerals Limited (ASX:BCI) in 2016, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether BCI Minerals pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for BCI Minerals

Comparing BCI Minerals Limited's CEO Compensation With the industry

According to our data, BCI Minerals Limited has a market capitalization of AU$156m, and paid its CEO total annual compensation worth AU$713k over the year to June 2020. That's a notable increase of 12% on last year. We note that the salary portion, which stands at AU$512.4k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below AU$269m, reported a median total CEO compensation of AU$312k. Accordingly, our analysis reveals that BCI Minerals Limited pays Alwyn Vorster north of the industry median. What's more, Alwyn Vorster holds AU$1.5m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 69% of total compensation represents salary and 31% is other remuneration. BCI Minerals is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation veers towards salary, it suggests that the variable portion – which is generally tied to performance, is lower.

A Look at BCI Minerals Limited's Growth Numbers

Over the last three years, BCI Minerals Limited has shrunk its earnings per share by 65% per year. In the last year, its revenue is up 41%.

The decrease in EPS could be a concern for some investors. But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has BCI Minerals Limited Been A Good Investment?

Boasting a total shareholder return of 87% over three years, BCI Minerals Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary…

As we touched on above, BCI Minerals Limited is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Still, shareholder returns over the last three years,and recent revenue growth have been trending northwards. The only sore spot is EPS growth, which is negative over the same period. Although we would have liked to see EPS growth, positive shareholder returns, and growing revenues make us believe CEO compensation is reasonable.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 4 warning signs for BCI Minerals you should be aware of, and 1 of them doesn't sit too well with us.

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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