We Think Some Shareholders May Hesitate To Increase Nagambie Resources Limited's (ASX:NAG) CEO Compensation
Key Insights
Nagambie Resources to hold its Annual General Meeting on 29th of November
Total pay for CEO James Earle includes AU$233.3k salary
Total compensation is similar to the industry average
Over the past three years, Nagambie Resources' EPS fell by 31% and over the past three years, the total loss to shareholders 41%
The underwhelming share price performance of Nagambie Resources Limited (ASX:NAG) in the past three years would have disappointed many shareholders. Per share earnings growth is also lacking, despite revenue growth. Shareholders will have a chance to take their concerns to the board at the next AGM on 29th of November and vote on resolutions including executive compensation, which studies show may have an impact on company performance. Here's our take on why we think shareholders might be hesitant about approving a raise at the moment.
Check out our latest analysis for Nagambie Resources
How Does Total Compensation For James Earle Compare With Other Companies In The Industry?
At the time of writing, our data shows that Nagambie Resources Limited has a market capitalization of AU$17m, and reported total annual CEO compensation of AU$377k for the year to June 2023. This means that the compensation hasn't changed much from last year. We note that the salary portion, which stands at AU$233.3k constitutes the majority of total compensation received by the CEO.
For comparison, other companies in the Australian Metals and Mining industry with market capitalizations below AU$304m, reported a median total CEO compensation of AU$385k. So it looks like Nagambie Resources compensates James Earle in line with the median for the industry.
Component | 2023 | 2022 | Proportion (2023) |
Salary | AU$233k | AU$167k | 62% |
Other | AU$144k | AU$221k | 38% |
Total Compensation | AU$377k | AU$388k | 100% |
Speaking on an industry level, nearly 62% of total compensation represents salary, while the remainder of 38% is other remuneration. Nagambie Resources is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. 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.
Nagambie Resources Limited's Growth
Over the last three years, Nagambie Resources Limited has shrunk its earnings per share by 31% per year. Its revenue is up 20% over the last year.
The decrease in EPS could be a concern for some investors. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Nagambie Resources Limited Been A Good Investment?
Few Nagambie Resources Limited shareholders would feel satisfied with the return of -41% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary...
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. In the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan is in line with their expectations.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 5 warning signs for Nagambie Resources (3 make us uncomfortable!) 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.
