Tom Revy became the CEO of BlackEarth Minerals NL (ASX:BEM) in 2017, 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 look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for BlackEarth Minerals.

Check out our latest analysis for BlackEarth Minerals

Comparing BlackEarth Minerals NL's CEO Compensation With the industry

Our data indicates that BlackEarth Minerals NL has a market capitalization of AU$8.2m, and total annual CEO compensation was reported as AU$370k for the year to June 2020. That's a slight decrease of 5.8% on the prior year. Notably, the salary which is AU$250.0k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under AU$257m, the reported median total CEO compensation was AU$307k. From this we gather that Tom Revy is paid around the median for CEOs in the industry. What's more, Tom Revy holds AU$284k worth of shares in the company in their own name.

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. BlackEarth Minerals is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at BlackEarth Minerals NL's Growth Numbers

BlackEarth Minerals NL has reduced its earnings per share by 11% a year over the last three years. Its revenue is up 6.1% over the last year.

Overall this is not a very positive result for shareholders. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 BlackEarth Minerals NL Been A Good Investment?

Given the total shareholder loss of 78% over three years, many shareholders in BlackEarth Minerals NL are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

As we noted earlier, BlackEarth Minerals pays its CEO in line with similar-sized companies belonging to the same industry. In the meantime, the company has reported declining EPS growth and shareholder returns over the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.

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 4 warning signs for BlackEarth Minerals (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: BlackEarth Minerals 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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