Why we think shareholders might consider raising CEO compensation at Rumble Resources Limited (ASX: RTR)
The impressive results at Rumble Resources Limited (ASX: RTR) will be great news for shareholders recently. At the next annual general meeting on June 17, 2021, they would be interested in knowing more about the company’s strategy for the future and having the opportunity to vote on resolutions such as executive compensation and d ‘other business matters. Here, we’ll show why we think CEO compensation is appropriate, and discuss the advisability of a pay raise.
Check out our latest review for Rumble Resources
How does Shane Sikora’s total compensation compare to other companies in the industry?
Our data indicates that Rumble Resources Limited has a market capitalization of A $ 261 million and the CEO’s total annual compensation was reported at A $ 256,000 for the year up to June 2020. This is a significant increase of 17% compared to last year. In particular, the salary, which is AU $ 200.0k, represents the major part of the total compensation paid.
Compared to other companies in the industry with market capitalizations ranging from A $ 129 million to A $ 516 million, the median total CEO compensation was A $ 470,000. In other words, Rumble Resources pays its CEO less than the industry median. In addition, Shane Sikora also owns shares of Rumble Resources worth AU $ 3.6 million directly under their own name, which tells us that they have a significant personal stake in the company.
|Salary||AU $ 200,000||A $ 196,000||78%|
|Other||AU $ 56,000||AU $ 23,000||22%|
|Total compensation||A $ 256,000||A $ 219,000||100%|
In terms of industry, salary made up around 69% of total compensation for all the companies we analyzed, while other compensation made up 31% of the pie. Rumble Resources pays 78% of compensation as a salary, well above the industry average. If the total compensation is oriented towards the salary, this suggests that the variable part – which is generally linked to performance, is lower.
A look at Rumble Resources Limited’s growth figures
Rumble Resources Limited has seen its earnings per share (EPS) increase by 64% per year over the past three years. Over the past year, its turnover has increased by 2,550%.
This shows that the company has improved recently and this is good news for shareholders. It’s great to see that revenue growth is also strong. These measurements suggest that the company is growing strongly. While we don’t have an analyst forecast for the company, shareholders might want to take a look at this detailed historical chart of earnings, income and cash flow.
Was Rumble Resources Limited a Good Investment?
Most shareholders would likely be happy with Rumble Resources Limited for delivering a total return of 554% over three years. This strong performance could mean that some shareholders would not object to the CEO being paid more than is normal for a company of its size.
Some shareholders are likely to be more lenient with CEO compensation at the next annual general meeting given the satisfactory performance of the company recently. In saying this, some shareholders may think that the most important questions to address may be how management plans to steer the company towards sustainable profitability in the future.
CEO compensation is just one of the many factors to consider when reviewing company performance. In our study, we found 4 warning signs for Rumble Resources you need to be aware of this, and 2 of them make us uncomfortable.
Arguably, the quality of the company is much more important than the compensation levels of CEOs. So look at this free list of interesting companies that have a HIGH return on equity 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 shares 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 the mentioned stocks.
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