Does White Cliff Minerals Limited’s (ASX:WCN) CEO Pay Compare Well With Peers?

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Is WCN’s CEO overpaid relative to the market?

Even though no standard benchmark exists, since remuneration should account for specific factors of the company and market, we can estimate a high-level benchmark to see if WCN deviates substantially from its peers. This outcome helps investors ask the right question about Hibberd’s incentive alignment. Normally, an Australian small-cap is worth around $140M, creates earnings of $10M, and remunerates its CEO at roughly $500,000 per year. Typically I’d use market cap and profit as factors determining performance, however, WCN’s negative earnings reduces the usefulness of my formula. Given the range of pay for small-cap executives, it seems like Hibberd is remunerated sensibly relative to peers. Putting everything together, although WCN is loss-making, it seems like the CEO’s pay is reflective of the appropriate level.

Next Steps:

CEO pay is one of those topics of high controversy. Nonetheless, it should be talked about with full transparency from the board to shareholders. Is Hibberd remunerated appropriately based on other factors we have not covered today? Is this justified? As a shareholder, you should be aware of how those that represent you (i.e. the board of directors) make decisions on CEO pay and whether their incentives are aligned with yours. If you have not done so already, I highly recommend you to complete your research by taking a look at the following:

1. Governance: To find out more about WCN’s governance, look through our infographic report of the company’s board and management.
2. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of WCN? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

To help readers see pass 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.