Increases to New World Resources Limited's (ASX:NWC) CEO Compensation Might Cool off for now
Key Insights
New World Resources will host its Annual General Meeting on 9th of November
Salary of AU$348.6k is part of CEO Mike Haynes's total remuneration
Total compensation is 110% above industry average
Over the past three years, New World Resources' EPS fell by 14% and over the past three years, the total loss to shareholders 43%
The underwhelming share price performance of New World Resources Limited (ASX:NWC) in the past three years would have disappointed many shareholders. In addition, the company's per-share earnings growth is not looking good, despite growing revenues. Shareholders will have a chance to take their concerns to the board at the next AGM on 9th of November and vote on resolutions including executive compensation, which studies show may have an impact on company performance. Here's why we think shareholders should hold off on a raise for the CEO at the moment.
Check out our latest analysis for New World Resources
Comparing New World Resources Limited's CEO Compensation With The Industry
At the time of writing, our data shows that New World Resources Limited has a market capitalization of AU$57m, and reported total annual CEO compensation of AU$810k for the year to June 2023. We note that's an increase of 70% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at AU$349k.
In comparison with other companies in the Australian Metals and Mining industry with market capitalizations under AU$311m, the reported median total CEO compensation was AU$385k. This suggests that Mike Haynes is paid more than the median for the industry. What's more, Mike Haynes holds AU$1.0m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2023 | 2022 | Proportion (2023) |
Salary | AU$349k | AU$324k | 43% |
Other | AU$461k | AU$153k | 57% |
Total Compensation | AU$810k | AU$477k | 100% |
On an industry level, roughly 61% of total compensation represents salary and 39% is other remuneration. New World Resources sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
A Look at New World Resources Limited's Growth Numbers
Over the last three years, New World Resources Limited has shrunk its earnings per share by 14% per year. In the last year, its revenue is up 2,390%.
The decrease in EPS could be a concern for some investors. But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 New World Resources Limited Been A Good Investment?
Few New World Resources Limited shareholders would feel satisfied with the return of -43% over three years. So shareholders would probably want the company to be less generous with CEO compensation.
To Conclude...
The company's earnings haven't grown and possibly because of that, the stock has performed poorly, resulting in a loss for the company's shareholders. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 6 warning signs for New World Resources (3 don't sit too well with us!) that you should be aware of before investing here.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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.
