Luke Tonkin became the CEO of Silver Lake Resources Limited (ASX:SLR) in 2014, 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 Silver Lake Resources.
How Does Total Compensation For Luke Tonkin Compare With Other Companies In The Industry?
According to our data, Silver Lake Resources Limited has a market capitalization of AU$2.1b, and paid its CEO total annual compensation worth AU$1.7m over the year to June 2020. That's a notable increase of 18% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at AU$753k.
In comparison with other companies in the industry with market capitalizations ranging from AU$1.4b to AU$4.4b, the reported median CEO total compensation was AU$1.5m. From this we gather that Luke Tonkin is paid around the median for CEOs in the industry. What's more, Luke Tonkin holds AU$1.3m worth of shares in the company in their own name.
Talking in terms of the industry, salary represented approximately 68% of total compensation out of all the companies we analyzed, while other remuneration made up 32% of the pie. In Silver Lake Resources' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Silver Lake Resources Limited's Growth Numbers
Silver Lake Resources Limited's earnings per share (EPS) grew 326% per year over the last three years. It achieved revenue growth of 86% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Silver Lake Resources Limited Been A Good Investment?
Boasting a total shareholder return of 479% over three years, Silver Lake Resources Limited has done well by shareholders. 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.
As we noted earlier, Silver Lake Resources pays its CEO in line with similar-sized companies belonging to the same industry. Few would be critical of the leadership, since returns have been juicy and EPS are moving in the right direction. So one could argue that CEO compensation is quite modest, if you consider company performance! Stockholders might even be okay with a bump in pay, seeing as how investor returns have been so strong.
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. We identified 3 warning signs for Silver Lake Resources (2 make us uncomfortable!) that you should be aware of before investing here.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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