Andrew Woskett became the CEO of Minotaur Exploration Limited (ASX:MEP) in 2010, 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 evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

Check out our latest analysis for Minotaur Exploration

Comparing Minotaur Exploration Limited's CEO Compensation With the industry

Our data indicates that Minotaur Exploration Limited has a market capitalization of AU$35m, and total annual CEO compensation was reported as AU$466k for the year to June 2020. That's a notable increase of 25% on last year. Notably, the salary which is AU$339.3k, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below AU$279m, reported a median total CEO compensation of AU$309k. This suggests that Andrew Woskett is paid more than the median for the industry. Furthermore, Andrew Woskett directly owns AU$125k worth of shares in the company.

On an industry level, around 70% of total compensation represents salary and 30% is other remuneration. Although there is a difference in how total compensation is set, Minotaur Exploration more or less reflects the market in terms of setting the salary. If total compensation veers towards salary, it suggests that the variable portion – which is generally tied to performance, is lower.

Minotaur Exploration Limited's Growth

Minotaur Exploration Limited's earnings per share (EPS) grew 29% per year over the last three years. It saw its revenue drop 70% over the last year.

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 Minotaur Exploration Limited Been A Good Investment?

Most shareholders would probably be pleased with Minotaur Exploration Limited for providing a total return of 33% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude…

As we noted earlier, Minotaur Exploration pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Importantly though, EPS growth and shareholder returns are very impressive over the last three years. As a result of the excellent all-round performance of the company, we believe CEO compensation is fair. Given the strong history of shareholder returns, the shareholders are probably very happy with Andrew's performance.

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. In our study, we found 5 warning signs for Minotaur Exploration you should be aware of, and 2 of them are potentially serious.

Important note: Minotaur Exploration 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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