Luke Tonkin was the CEO of Silver Lake Resources Limited (ASX:SLR) since 2014, and this article will examine executive compensation in relation to overall company performance. This analysis will also seek to assess whether the CEO is being adequately compensated, given the recent growth in earnings and investor returns for Silver Lake Resources.
Check out our latest analysis for Silver Lake Resources
Silver Lake Resources Limited CEO Compensation Comparison with the Industry
Our data indicates that Silver Lake Resources Limited has a market capitalization of A$1.5 billion and total annual CEO compensation was A$1.7 million for the year to June 2020. notably an increase of 18% compared to the previous year. We think total compensation is more important, but our data shows the CEO salary is lower, at A$753,000.
In comparison to other companies in the industry with market capitalization 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. Additionally, Luke Tonkin also owns shares of Silver Lake Resources worth A$898,000 directly under his own name.
|Making up||2020||2019||Percentage (2020)|
|The total compensation||AU$1.7 million||AU$1.4 million||100%|
Speaking at the industry level, nearly 69% of total compensation is salary, while the remaining 31% is other compensation. Silver Lake Resources pays a modest chunk of compensation through salary, compared to the industry as a whole. It is important to note that a trend in non-salary compensation suggests that total compensation is linked to company performance.
A look at Silver Lake Resources Limited’s growth figures
Silver Lake Resources Limited has seen its earnings per share (EPS) increase by 326% annually over the past three years. It has achieved 86% revenue growth over the past year.
This demonstrates that the company has recently improved and is good news for shareholders. The combination of strong revenue growth and improving mid-term EPS certainly indicates the kind of growth we like to see. In the future, you might want to check out this free visual report on analyst forecasts for the future profits of the company.
Was Silver Lake Resources Limited a good investment?
Most shareholders would probably be delighted that Silver Lake Resources Limited is offering a 330% total return over three years. So they might not be worried at all if the CEO were to be paid more than is normal for companies of the same size.
As previously reported, Luke is paid more than is normal for CEOs of similarly sized companies 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 that the compensation of the CEO is fair. Given the strong history of shareholder returns, shareholders are likely very pleased with Luke’s performance.
It is always advisable to analyze the compensation of the CEO, as well as to carry out an in-depth analysis of the key performance areas of the company. That’s why we did our research and identified 3 warning signs for Silver Lake Resources (2 of which are significant!) that you need to know in order to have an overall understanding of the stock.
Important Note: Silver Lake Resources is an exciting stock, but we understand that investors may be looking for a clean balance sheet and exceptional returns. You might find something better in this list of interesting companies with high ROE and low debt.
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This Simply Wall St article is general in nature. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.
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