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How Should Investors Feel About Syrah Resources Limited's (ASX:SYR) CEO Pay?

Simply Wall St

Shaun Verner became the CEO of Syrah Resources Limited ( ASX:SYR ) in 2017. 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. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Syrah Resources

How Does Shaun Verner's Compensation Compare With Similar Sized Companies?

According to our data, Syrah Resources Limited has a market capitalization of AU$291m, and pays its CEO total annual compensation worth US$934k. (This figure is for the year to December 2018). While we always look at total compensation first, we note that the salary component is less, at US$352k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$100m to US$400m. The median total CEO compensation was US$503k.

As you can see, Shaun Verner is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Syrah Resources Limited is paying too much. 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 Syrah Resources has changed over time.

ASX:SYR CEO Compensation, August 20th 2019

Is Syrah Resources Limited Growing?

On average over the last three years, Syrah Resources Limited has shrunk earnings per share by 25% each year (measured with a line of best fit). It saw its revenue drop -7.9% over the last year.

Sadly for shareholders, earnings per share are actually down, over three years. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. You might want to check this free visual report on analyst forecasts for future earnings .

Has Syrah Resources Limited Been A Good Investment?

Since shareholders would have lost about 84% over three years, some Syrah Resources Limited shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

We examined the amount Syrah Resources Limited pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

Earnings per share have not grown in three years, and the revenue growth fails to impress us.

Just as bad, share price gains for investors have failed to materialize, over the same period. In our opinion the CEO might be paid too generously! Whatever your view on compensation, you might want to check if insiders are buying or selling Syrah Resources shares (free trial).

If you want to buy a stock that is better than Syrah Resources, this free list of high return, low debt companies is a great place to look.

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.