Yahoo Finance Increases to CEO Compensation Might Be Put On Hold For Now at Alkane Resources Limited (ASX:ALK)
CEO Nic Earner has done a decent job of delivering relatively good performance at Alkane Resources Limited (ASX:ALK) recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 17 November 2021. However, some shareholders may still want to keep CEO compensation within reason.
See our latest analysis for Alkane Resources
How Does Total Compensation For Nic Earner Compare With Other Companies In The Industry?
According to our data, Alkane Resources Limited has a market capitalization of AU$557m, and paid its CEO total annual compensation worth AU$1.3m over the year to June 2021. That's a fairly small increase of 4.1% over the previous year. While we always look at total compensation first, our analysis shows that the salary component is less, at AU$577k.
In comparison with other companies in the industry with market capitalizations ranging from AU$272m to AU$1.1b, the reported median CEO total compensation was AU$936k. Hence, we can conclude that Nic Earner is remunerated higher than the industry median. Moreover, Nic Earner also holds AU$3.4m worth of Alkane Resources stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2021 | 2020 | Proportion (2021) |
Salary | AU$577k | AU$484k | 43% |
Other | AU$759k | AU$800k | 57% |
Total Compensation | AU$1.3m | AU$1.3m | 100% |
Talking in terms of the industry, salary represented approximately 59% of total compensation out of all the companies we analyzed, while other remuneration made up 41% of the pie. In Alkane Resources' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Alkane Resources Limited's Growth
Alkane Resources Limited has seen its earnings per share (EPS) increase by 5.2% a year over the past three years. In the last year, its revenue is up 76%.
It's great to see that revenue growth is strong. Combined with modest EPS growth, we get a good impression of the company. We wouldn't say this is necessarily top notch growth, but it is certainly promising. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Alkane Resources Limited Been A Good Investment?
We think that the total shareholder return of 435%, over three years, would leave most Alkane Resources Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
To Conclude...
The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. That's why we did our research, and identified 2 warning signs for Alkane Resources (of which 1 is concerning!) that you should know about in order to have a holistic understanding of the stock.
Important note: Alkane 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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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