Yahoo Finance How Should Investors React To 3D Resources Limited's (ASX:DDD) CEO Pay?
Peter Mitchell has been the CEO of 3D Resources Limited (ASX:DDD) since 2010. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
See our latest analysis for 3D Resources
How Does Peter Mitchell's Compensation Compare With Similar Sized Companies?
According to our data, 3D Resources Limited has a market capitalization of AU$2.1m, and paid its CEO total annual compensation worth AU$207k over the year to June 2019. Notably, the salary of AU$207k is the vast majority of the CEO compensation. We examined a group of similar sized companies, with market capitalizations of below AU$315m. The median CEO total compensation in that group is AU$389k.
Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where 3D Resources stands. Talking in terms of the sector, salary represented approximately 69% of total compensation out of all the companies we analysed, while other remuneration made up 31% of the pie. On a company level, 3D Resources prefers to reward its CEO through a salary, opting not to pay Peter Mitchell through non-salary benefits.
This would give shareholders a good impression of the company, since most similar size companies have to pay more, leaving less for shareholders. Though positive, it's important we delve into the performance of the actual business. You can see a visual representation of the CEO compensation at 3D Resources, below.
Is 3D Resources Limited Growing?
Over the last three years 3D Resources Limited has seen earnings per share (EPS) move in a positive direction by an average of 3.0% per year (using a line of best fit). It saw its revenue drop 97% over the last year.
I would prefer it if there was revenue growth, but the improvement in EPS is good. 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. 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 3D Resources Limited Been A Good Investment?
Given the total loss of 72% over three years, many shareholders in 3D Resources Limited are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary...
It looks like 3D Resources Limited pays its CEO less than similar sized companies.
It's well worth noting that while Peter Mitchell is paid less than most company leaders (at similar sized companies), performance has been somewhat uninspiring, and total returns have been lacking. So while shareholders shouldn't be overly concerned about CEO compensation, they would probably like to see improved shareholder returns before seeing a pay increase. CEO compensation is an important area to keep your eyes on, but we've also identified 7 warning signs for 3D Resources (4 are a bit unpleasant!) that you should be aware of before investing here.
If you want to buy a stock that is better than 3D Resources, this free list of high return, low debt companies is a great place to look.
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.
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. Thank you for reading.
