Here's Why We Think Cullen Resources Limited's (ASX:CUL) CEO Compensation Looks Fair

Key Insights

• Cullen Resources will host its Annual General Meeting on 28th of November
• Total pay for CEO Chris Ringrose includes AU$210.0k salary
• The total compensation is 37% less than the average for the industry
• Cullen Resources' EPS grew by 15% over the past three years while total shareholder loss over the past three years was 57%

The performance at Cullen Resources Limited (ASX:CUL) has been rather lacklustre of late and shareholders may be wondering what CEO Chris Ringrose is planning to do about this. At the next AGM coming up on 28th of November, they can influence managerial decision making through voting on resolutions, including executive remuneration. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. In our opinion, CEO compensation does not look excessive and we discuss why.

View our latest analysis for Cullen Resources

How Does Total Compensation For Chris Ringrose Compare With Other Companies In The Industry?

Our data indicates that Cullen Resources Limited has a market capitalization of AU$4.8m, and total annual CEO compensation was reported as AU$242k for the year to June 2023. That is, the compensation was roughly the same as last year. In particular, the salary of AU$210.0k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the Australian Metals and Mining industry with market capitalizations below AU$305m, we found that the median total CEO compensation was AU$386k. Accordingly, Cullen Resources pays its CEO under the industry median.

Component	2023	2022	Proportion (2023)
Salary	AU$210k	AU$211k	87%
Other	AU$32k	AU$37k	13%
Total Compensation	AU$242k	AU$248k	100%

On an industry level, around 61% of total compensation represents salary and 39% is other remuneration. It's interesting to note that Cullen Resources pays out a greater portion of remuneration through salary, compared to the industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Cullen Resources Limited's Growth Numbers

Cullen Resources Limited has seen its earnings per share (EPS) increase by 15% a year over the past three years. In the last year, its revenue is up 52%.

Shareholders would be glad to know that the company has improved itself over the last few years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. 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 Cullen Resources Limited Been A Good Investment?

With a total shareholder return of -57% over three years, Cullen Resources Limited shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

The loss to shareholders over the past three years is certainly concerning. This diverges with the robust growth in EPS, suggesting that there is a large discrepancy between share price and fundamentals. A key question may be why the fundamentals have not yet been reflected into the share price. In the upcoming AGM, shareholders will get the opportunity to discuss these concerns with the board and assess if the board's plan is likely to improve company performance.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 5 warning signs for Cullen Resources (3 don't sit too well with us!) that you should be aware of before investing here.

Switching gears from Cullen Resources, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.