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In 2012 Jamie Sullivan was appointed CEO of GME Resources Limited (ASX:GME). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for GME Resources
How Does Jamie Sullivan’s Compensation Compare With Similar Sized Companies?
Our data indicates that GME Resources Limited is worth AU$42m, and total annual CEO compensation is AU$180k. (This number is for the twelve months until 2018). While we always look at total compensation first, we note that the salary component is less, at AU$164k. We took a group of companies with market capitalizations below AU$282m, and calculated the median CEO compensation to be AU$363k.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see, below, how CEO compensation at GME Resources has changed over time.
Is GME Resources Limited Growing?
Over the last three years GME Resources Limited has grown its earnings per share (EPS) by an average of 81% per year (using a line of best fit). Its revenue is down -100% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. 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 GME Resources Limited Been A Good Investment?
Boasting a total shareholder return of 250% over three years, GME Resources 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…
It appears that GME Resources Limited remunerates its CEO below most similar sized companies. Since the business is growing, many would argue this suggests the pay is modest. The pleasing shareholder returns are the cherry on top; you might even consider that Jamie Sullivan deserves a raise!