Is Avesoro Resources Inc.’s (TSE:ASO) CEO Overpaid Relative To Its Peers?
Serhan Umurhan has been the CEO of Avesoro Resources Inc. (TSE:ASO) since 2016. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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 Avesoro Resources
How Does Serhan Umurhan’s Compensation Compare With Similar Sized Companies?
According to our data, Avesoro Resources Inc. has a market capitalization of CA$188m, and pays its CEO total annual compensation worth US$687k. (This figure is for the year to 2017). While we always look at total compensation first, we note that the salary component is less, at US$481k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO compensation to be US$117k.
It would therefore appear that Avesoro Resources Inc. pays Serhan Umurhan 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.
The graphic below shows how CEO compensation at Avesoro Resources has changed from year to year.
Is Avesoro Resources Inc. Growing?
Over the last three years Avesoro Resources Inc. has grown its earnings per share (EPS) by an average of 70% per year. In the last year, its revenue is up 200%.
This demonstrates that the company has been improving recently. A good result. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business.
Shareholders might be interested in this free visualization of analyst forecasts. .
Has Avesoro Resources Inc. Been A Good Investment?
Given the total loss of 83% over three years, many shareholders in Avesoro Resources Inc. are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary…
We compared the total CEO remuneration paid by Avesoro Resources Inc., and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
However, the earnings per share growth over three years is certainly impressive. Having said that, shareholders may be disappointed with the weak returns over the last three years. Considering the per share profit growth, but keeping in mind the weak returns, we’d need more time to form a view on CEO compensation. Shareholders may want to check for free if Avesoro Resources insiders are buying or selling shares.
Of course, the past can be informative so you might be interested in considering this analytical visualization showing the company history of earnings and revenue.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
