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Shareholders may be wondering what CEO Anton Billis plans to do to improve the less than great performance at Rand Mining Limited (ASX:RND) recently. At the next AGM coming up on 26 November 2021, they can influence managerial decision making through voting on resolutions, including executive remuneration. It has been shown that setting appropriate executive remuneration incentivises the management to act in the interests of shareholders. We think CEO compensation looks appropriate given the data we have put together.
Comparing Rand Mining Limited's CEO Compensation With the industry
According to our data, Rand Mining Limited has a market capitalization of AU$87m, and paid its CEO total annual compensation worth AU$140k over the year to June 2021. We note that's a decrease of 26% compared to last year. In particular, the salary of AU$91.7k, makes up a huge portion of the total compensation being paid to the CEO.
On comparing similar-sized companies in the industry with market capitalizations below AU$275m, we found that the median total CEO compensation was AU$352k. This suggests that Anton Billis is paid below the industry median. Furthermore, Anton Billis directly owns AU$3.5m worth of shares in the company, implying that they are deeply invested in the company's success.
Talking in terms of the industry, salary represented approximately 59% of total compensation out of all the companies we analyzed, while other remuneration made up 41% of the pie. According to our research, Rand Mining has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Rand Mining Limited's Growth
Over the last three years, Rand Mining Limited has shrunk its earnings per share by 10% per year. Its revenue is up 1,440% over the last year.
The decrease in EPS could be a concern for some investors. On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 Rand Mining Limited Been A Good Investment?
Since shareholders would have lost about 10% over three years, some Rand Mining Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.
The lack of share price growth will be weighing on shareholders' minds as they go into the AGM. One reason for the lacklustre price performance could be that earnings just haven't grown much. Shareholders will get the chance to question the board on key concerns and revisit their investment thesis with regards to the company.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 3 warning signs for Rand Mining (1 is a bit concerning!) that you should be aware of before investing here.
Important note: Rand Mining 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.
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.
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