Luke Tonkin was the CEO of Silver Lake Resources Limited (ASX: SLR) since 2014, and this article will examine executive compensation relative to overall company performance. This analysis will also seek to assess whether the CEO is being compensated properly, given recent earnings growth and investor returns for Silver Lake Resources.
Check out our latest review for Silver Lake Resources
Silver Lake Resources Limited CEO Compensation Comparison with Industry
Our data indicates that Silver Lake Resources Limited has a market capitalization of AU $ 1.5 billion, and the CEO’s total annual compensation was reported at AU $ 1.7 million for the year through June 2020. He This is notably an increase of 18% over the previous year. We think total compensation is more important, but our data shows the CEO salary is lower, at AU $ 753,000.
Compared to other companies in the industry with market capitalizations ranging from A $ 521 million to A $ 2.1 billion, the reported median total CEO compensation was A $ 1.1 million. This suggests that Luke Tonkin is paid more than the industry median. In addition, Luke Tonkin also owns shares of Silver Lake Resources valued at AU $ 898,000 directly under their own name.
|Making up||2020||2019||Proportion (2020)|
|Salary||A $ 753,000||A $ 683,000||45%|
|Other||AU $ 919,000||A $ 728,000||55%|
|Total compensation||1.7 million Australian dollars||1.4 million Australian dollars||100%|
At the industry level, almost 69% of total compensation is salary, while the remainder 31% is other compensation. Silver Lake Resources pays a modest bracket of compensation through salary, compared to the industry as a whole. It is important to note that an inclination towards non-salary compensation suggests that total compensation is linked to the performance of the company.
A look at the growth figures of Silver Lake Resources Limited
Silver Lake Resources Limited has seen its earnings per share (EPS) increase 326% per year over the past three years. It achieved 86% revenue growth over last year.
This shows that the company has improved recently and this is good news for the shareholders. The combination of strong revenue growth and improving EPS over the medium term is certainly indicative of the kind of growth we like to see. In the future, you may want to check out this free visual report at analyst forecasts for the future profits of the company.
Was Silver Lake Resources Limited a Good Investment?
Most shareholders would likely be happy with Silver Lake Resources Limited for its 330% three-year total return. So they might not be at all worried if the CEO were to be paid more than is normal for companies of the same size.
As mentioned earlier, Luke is paid more than is normal for CEOs of companies of similar size, and in the same industry. However, Silver Lake Resources has produced strong EPS growth and shareholder returns over the past three years. Due to the excellent overall performance of the company, we believe the compensation for the CEO is fair. Given the strong history of shareholder returns, shareholders are likely very satisfied with Luke’s performance.
It is always advisable to analyze the CEO’s compensation, as well as perform an in-depth analysis of the key performance areas of the company. This is why we did our research and identified 3 warning signs for Silver Lake Resources (2 of which are significant!) that you need to know to have a global understanding of the stock.
Important note: Silver Lake Resources is exciting stock, but we understand that investors can look for an unencumbered balance sheet and exceptional returns. You might find something better in this list of interesting companies with high ROE and low leverage.
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This Simply Wall St article is general in nature. It does not constitute a recommendation to buy or sell any stock and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.
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