Mark Zeptner has been the CEO of Ramelius Resources Limited (ASX:RMS) since 2014, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Ramelius Resources pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing Ramelius Resources Limited's CEO Compensation With the industry
At the time of writing, our data shows that Ramelius Resources Limited has a market capitalization of AU$1.6b, and reported total annual CEO compensation of AU$1.3m for the year to June 2020. Notably, that's an increase of 34% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at AU$633k.
On examining similar-sized companies in the industry with market capitalizations between AU$546m and AU$2.2b, we discovered that the median CEO total compensation of that group was AU$1.3m. From this we gather that Mark Zeptner is paid around the median for CEOs in the industry. Moreover, Mark Zeptner also holds AU$5.0m worth of Ramelius Resources stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, roughly 70% of total compensation represents salary and 30% is other remuneration. In Ramelius Resources' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Ramelius Resources Limited's Growth
Over the past three years, Ramelius Resources Limited has seen its earnings per share (EPS) grow by 69% per year. In the last year, its revenue is up 31%.
Shareholders would be glad to know that the company has improved itself over the last few years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Ramelius Resources Limited Been A Good Investment?
Boasting a total shareholder return of 375% over three years, Ramelius Resources Limited has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
As previously discussed, Mark is compensated close to the median for companies of its size, and which belong to the same industry. Investors would surely be happy to see that returns have been great, and that EPS is up. Indeed, many might consider that Mark is compensated rather modestly, given the solid company performance! In fact, shareholders might even think the CEO deserves a raise as a reward due to the fantastic returns generated.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 3 warning signs for Ramelius Resources that investors should think about before committing capital to this stock.
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.
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. 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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