In 2010 David Christensen was appointed CEO of Renascor Resources Limited (ASX:RNU). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does David Christensen’s Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Renascor Resources Limited has a market cap of AU$16m, and reported total annual CEO compensation of AU$481k for the year to June 2019. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at AU$274k. We took a group of companies with market capitalizations below AU$296m, and calculated the median CEO total compensation to be AU$384k.
So David Christensen is paid around the average of the companies we looked at. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
You can see a visual representation of the CEO compensation at Renascor Resources, below.
Is Renascor Resources Limited Growing?
Renascor Resources Limited has increased its earnings per share (EPS) by an average of 13% a year, over the last three years (using a line of best fit). It saw its revenue drop 98% over the last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. The lack of revenue growth isn’t ideal, but it is the bottom line that counts most in business. You might want to check this free visual report on analyst forecasts for future earnings.
Has Renascor Resources Limited Been A Good Investment?
Since shareholders would have lost about 50% over three years, some Renascor Resources Limited shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
David Christensen is paid around the same as most CEOs of similar size companies.
We think that the EPS growth is very pleasing, but it’s disappointing to see negative shareholder returns over three years. Considering the the positives we don’t think the CEO pays is too high, but it’s certainly hard to argue it is too low. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Renascor Resources.
Important note: Renascor Resources may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned.
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