Yahoo Finance Shareholders May Be Wary Of Increasing Strike Resources Limited's (ASX:SRK) CEO Compensation Package
Key Insights
Strike Resources will host its Annual General Meeting on 30th of November
CEO William Johnson's total compensation includes salary of AU$300.0k
The total compensation is similar to the average for the industry
Strike Resources' three-year loss to shareholders was 55% while its EPS was down 68% over the past three years
Strike Resources Limited (ASX:SRK) has not performed well recently and CEO William Johnson will probably need to up their game. At the upcoming AGM on 30th of November, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. From our analysis, we think CEO compensation may need a review in light of the recent performance.
View our latest analysis for Strike Resources
How Does Total Compensation For William Johnson Compare With Other Companies In The Industry?
At the time of writing, our data shows that Strike Resources Limited has a market capitalization of AU$16m, and reported total annual CEO compensation of AU$332k for the year to June 2023. That's a notable decrease of 23% on last year. Notably, the salary which is AU$300.0k, represents most of the total compensation being paid.
On comparing similar-sized companies in the Australian Metals and Mining industry with market capitalizations below AU$305m, we found that the median total CEO compensation was AU$386k. So it looks like Strike Resources compensates William Johnson in line with the median for the industry.
Component | 2023 | 2022 | Proportion (2023) |
Salary | AU$300k | AU$300k | 90% |
Other | AU$32k | AU$129k | 10% |
Total Compensation | AU$332k | AU$429k | 100% |
On an industry level, around 62% of total compensation represents salary and 38% is other remuneration. It's interesting to note that Strike Resources pays out a greater portion of remuneration through salary, compared to the industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
Strike Resources Limited's Growth
Over the last three years, Strike Resources Limited has shrunk its earnings per share by 68% per year. In the last year, the company lost virtually all of its revenue.
Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Strike Resources Limited Been A Good Investment?
The return of -55% over three years would not have pleased Strike Resources Limited shareholders. So shareholders would probably want the company to be less generous with CEO compensation.
To Conclude...
Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 5 warning signs for Strike Resources (of which 3 are a bit concerning!) that you should know about in order to have a holistic understanding of the stock.
Important note: Strike 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.
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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.
