Yahoo Finance Here's Why Shareholders May Want To Be Cautious With Increasing Range International Limited's (ASX:RAN) CEO Pay Packet
The underwhelming share price performance of Range International Limited (ASX:RAN) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 12 May 2021. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.
See our latest analysis for Range International
How Does Total Compensation For Stephen Bowhill Compare With Other Companies In The Industry?
Our data indicates that Range International Limited has a market capitalization of AU$7.2m, and total annual CEO compensation was reported as US$277k for the year to December 2020. That's a modest increase of 6.3% on the prior year. Notably, the salary which is US$169.2k, represents most of the total compensation being paid.
On comparing similar-sized companies in the industry with market capitalizations below AU$260m, we found that the median total CEO compensation was US$269k. This suggests that Range International remunerates its CEO largely in line with the industry average. Moreover, Stephen Bowhill also holds AU$183k worth of Range International stock directly under their own name.
Component | 2020 | 2019 | Proportion (2020) |
Salary | US$169k | US$173k | 61% |
Other | US$107k | US$87k | 39% |
Total Compensation | US$277k | US$260k | 100% |
On an industry level, around 69% of total compensation represents salary and 31% is other remuneration. In Range International's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at Range International Limited's Growth Numbers
Range International Limited's earnings per share (EPS) grew 85% per year over the last three years. Its revenue is down 14% over the previous year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Range International Limited Been A Good Investment?
Few Range International Limited shareholders would feel satisfied with the return of -77% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
Shareholders have not seen their shares grow in value, rather they have seen their shares decline. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would be keen to know what's holding the stock back when earnings have grown. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 5 warning signs for Range International you should be aware of, and 2 of them are a bit unpleasant.
Switching gears from Range International, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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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