In This Article:
Adrian Griffin has been the CEO of Lithium Australia NL (ASX:LIT) since 2011. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. 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.
See our latest analysis for Lithium Australia
How Does Adrian Griffin's Compensation Compare With Similar Sized Companies?
Our data indicates that Lithium Australia NL is worth AU$38m, and total annual CEO compensation is AU$705k. (This is based on the year to June 2018). While we always look at total compensation first, we note that the salary component is less, at AU$357k. We examined a group of similar sized companies, with market capitalizations of below AU$279m. The median CEO total compensation in that group is AU$354k.
It would therefore appear that Lithium Australia NL pays Adrian Griffin 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. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Lithium Australia has changed over time.
Is Lithium Australia NL Growing?
On average over the last three years, Lithium Australia NL has shrunk earnings per share by 20% each year (measured with a line of best fit). Its revenue is down -19% over last year.
Unfortunately, earnings per share have trended lower over the last three years. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Lithium Australia NL Been A Good Investment?
Since shareholders would have lost about 77% over three years, some Lithium Australia NL shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
We compared the total CEO remuneration paid by Lithium Australia NL, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.