Does PanTerra Gold Limited's (ASX:PGI) CEO Pay Reflect Performance?

Simply Wall St

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The CEO of PanTerra Gold Limited (ASX:PGI) is Brian Johnson. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. 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.

See our latest analysis for PanTerra Gold

How Does Brian Johnson's Compensation Compare With Similar Sized Companies?

According to our data, PanTerra Gold Limited has a market capitalization of AU$3.6m, and pays its CEO total annual compensation worth US$402k. (This number is for the twelve months until December 2018). That's actually a decrease on the year before. It is worth noting that the CEO compensation consists almost entirely of the salary, worth US$402k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$246k.

It would therefore appear that PanTerra Gold Limited pays Brian Johnson more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see, below, how CEO compensation at PanTerra Gold has changed over time.

ASX:PGI CEO Compensation, June 19th 2019

Is PanTerra Gold Limited Growing?

PanTerra Gold Limited has reduced its earnings per share by an average of 103% a year, over the last three years (measured with a line of best fit). Its revenue is up 2.3% over last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. The fairly low revenue growth fails to impress given that the earnings per share is down. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has PanTerra Gold Limited Been A Good Investment?

With a three year total loss of 81%, PanTerra Gold Limited would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We compared the total CEO remuneration paid by PanTerra Gold Limited, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.

Just as bad, share price gains for investors have failed to materialize, over the same period. This analysis suggests to us that the CEO is paid too generously! So you may want to check if insiders are buying PanTerra Gold shares with their own money (free access).

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.