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Shareholders will be pleased by the impressive results for Rumble Resources Limited (ASX:RTR) recently and CEO Shane Sikora has played a key role. At the upcoming AGM on 17 June 2021, they would be interested to hear about the company strategy going forward and get a chance to cast their votes on resolutions such as executive remuneration and other company matters. Let's take a look at why we think the CEO has done a good job and we'll present the case for a bump in pay.
How Does Total Compensation For Shane Sikora Compare With Other Companies In The Industry?
Our data indicates that Rumble Resources Limited has a market capitalization of AU$261m, and total annual CEO compensation was reported as AU$256k for the year to June 2020. Notably, that's an increase of 17% over the year before. Notably, the salary which is AU$200.0k, represents most of the total compensation being paid.
For comparison, other companies in the same industry with market capitalizations ranging between AU$129m and AU$516m had a median total CEO compensation of AU$470k. Accordingly, Rumble Resources pays its CEO under the industry median. What's more, Shane Sikora holds AU$3.6m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Talking in terms of the industry, salary represented approximately 69% of total compensation out of all the companies we analyzed, while other remuneration made up 31% of the pie. It's interesting to note that Rumble Resources pays out a greater portion of remuneration through salary, compared to the industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
A Look at Rumble Resources Limited's Growth Numbers
Rumble Resources Limited has seen its earnings per share (EPS) increase by 64% a year over the past three years. Its revenue is up 2,550% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Rumble Resources Limited Been A Good Investment?
Boasting a total shareholder return of 554% over three years, Rumble Resources Limited has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
Some shareholders will probably be more lenient on CEO compensation in the upcoming AGM given the pleasing performance of the company recently. However, despite the strong growth in earnings and share price growth, the focus for shareholders would be how the company plans to steer the company towards sustainable profitability in the near future.
CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 4 warning signs for Rumble Resources you should be aware of, and 2 of them can't be ignored.
Important note: Rumble Resources is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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