Yahoo Finance Is Red Emperor Resources NL's (ASX:RMP) CEO Salary Justified?
Greg Bandy is the CEO of Red Emperor Resources NL (ASX:RMP). 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 we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
View our latest analysis for Red Emperor Resources
How Does Greg Bandy's Compensation Compare With Similar Sized Companies?
According to our data, Red Emperor Resources NL has a market capitalization of AU$4.2m, and paid its CEO total annual compensation worth AU$390k over the year to June 2019. While we always look at total compensation first, we note that the salary component is less, at AU$180k. We took a group of companies with market capitalizations below AU$315m, and calculated the median CEO total compensation to be AU$390k.
Now let's take a look at the pay mix on an industry and company level to gain a better understanding of where Red Emperor Resources stands. Talking in terms of the sector, salary represented approximately 73% of total compensation out of all the companies we analysed, while other remuneration made up 27% of the pie. Non-salary compensation represents a greater slice of the remuneration pie for Red Emperor Resources, in sharp contrast to the overall sector.
So Greg Bandy receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn't tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context. You can see a visual representation of the CEO compensation at Red Emperor Resources, below.
Is Red Emperor Resources NL Growing?
Over the last three years Red Emperor Resources NL has shrunk its earnings per share by an average of 94% per year (measured with a line of best fit). In the last year, its revenue is down 71%.
Sadly for shareholders, earnings per share are actually down, over three years. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Red Emperor Resources NL Been A Good Investment?
With a three year total loss of 62%, Red Emperor Resources NL would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary...
Greg Bandy is paid around the same as most CEOs of similar size companies.
The company isn't growing EPS, and shareholder returns have been disappointing. Suffice it to say, we don't think the CEO is underpaid! CEO compensation is an important area to keep your eyes on, but we've also identified 6 warning signs for Red Emperor Resources (2 are significant!) that you should be aware of before investing here.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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.
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