Yahoo Finance Is Resource Development Group Limited's (ASX:RDG) CEO Pay Justified?
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Andrew Ellison has been the CEO of Resource Development Group Limited (ASX:RDG) since 2015. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. 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 Resource Development Group
How Does Andrew Ellison's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Resource Development Group Limited has a market cap of AU$10m, and is paying total annual CEO compensation of AU$167k. (This number is for the twelve months until June 2018). Notably, the salary of AU$167k is the vast majority of the CEO compensation. We examined a group of similar sized companies, with market capitalizations of below AU$289m. The median CEO total compensation in that group is AU$358k.
Most shareholders would consider it a positive that Andrew Ellison takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.
You can see, below, how CEO compensation at Resource Development Group has changed over time.
Is Resource Development Group Limited Growing?
On average over the last three years, Resource Development Group Limited has shrunk earnings per share by 120% each year (measured with a line of best fit). Its revenue is up 408% over last year.
Investors should note that, over three years, earnings per share are down. On the other hand, the strong revenue growth suggests the business is growing. These two metric are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Resource Development Group Limited Been A Good Investment?
I think that the total shareholder return of 33%, over three years, would leave most Resource Development Group Limited shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary...
It appears that Resource Development Group Limited remunerates its CEO below most similar sized companies.
Andrew Ellison is paid less than what is normal at similar size companies, and the total shareholder return has been pleasing over the last three years. We would like to see EPS growth, but in our view it seems the CEO is modestly remunerated. Shareholders may want to check for free if Resource Development Group insiders are buying or selling shares.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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.
