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Ramelius Resources Limited's (ASX:RMS) CEO Might Not Expect Shareholders To Be So Generous This Year

Key Insights

Ramelius Resources Limited (ASX:RMS) has not performed well recently and CEO Mark Zeptner will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 23rd of November. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. From our analysis, we think CEO compensation may need a review in light of the recent performance.

See our latest analysis for Ramelius Resources

Comparing Ramelius Resources Limited's CEO Compensation With The Industry

Our data indicates that Ramelius Resources Limited has a market capitalization of AU$1.8b, and total annual CEO compensation was reported as AU$1.7m for the year to June 2023. We note that's an increase of 17% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at AU$781k.

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For comparison, other companies in the Australian Metals and Mining industry with market capitalizations ranging between AU$615m and AU$2.5b had a median total CEO compensation of AU$1.5m. This suggests that Ramelius Resources remunerates its CEO largely in line with the industry average. Moreover, Mark Zeptner also holds AU$7.2m worth of Ramelius Resources stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component

2023

2022

Proportion (2023)

Salary

AU$781k

AU$743k

45%

Other

AU$941k

AU$731k

55%

Total Compensation

AU$1.7m

AU$1.5m

100%

On an industry level, around 61% of total compensation represents salary and 39% is other remuneration. Ramelius Resources sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
ceo-compensation

A Look at Ramelius Resources Limited's Growth Numbers

Over the last three years, Ramelius Resources Limited has shrunk its earnings per share by 31% per year. It achieved revenue growth of 4.5% over the last year.

Few shareholders would be pleased to read that EPS have declined. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Ramelius Resources Limited Been A Good Investment?

Given the total shareholder loss of 12% over three years, many shareholders in Ramelius Resources Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for Ramelius Resources that investors should be aware of in a dynamic business environment.

Important note: Ramelius 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.