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David Christensen became the CEO of Renascor Resources Limited (ASX:RNU) in 2010. First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
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$21m, and is paying total annual CEO compensation of AU$312k. (This number is for the twelve months until 2018). We think total compensation is more important but we note that the CEO salary is lower, at AU$274k. We looked at a group of companies with market capitalizations under AU$281m, and the median CEO compensation was AU$362k.
So David Christensen receives a similar amount to the median CEO pay, amongst 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.
The graphic below shows how CEO compensation at Renascor Resources has changed from year to year.
Is Renascor Resources Limited Growing?
Over the last three years Renascor Resources Limited has grown its earnings per share (EPS) by an average of 72% per year (using a line of best fit). The trailing twelve months of revenue was pretty much the same as the prior period.
This demonstrates that the company has been improving recently. A good result. It’s also good to see modest revenue growth, suggesting the underlying business is healthy. We don’t have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Renascor Resources Limited Been A Good Investment?
With a three year total loss of 24%, Renascor Resources Limited would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
Remuneration for David Christensen is close enough to the median pay for a CEO of a similar sized company .
We’d say the company can boast of its EPS growth, but we cannot say the same about the lacklustre shareholder returns (over the last three years). Considering the improvement in earnings per share, one could argue that the CEO pay is appropriate, albeit not too low. So you may want to check if insiders are buying Renascor Resources shares with their own money (free access).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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. On rare occasion, data errors may occur. Thank you for reading.