Peter Mitchell became the CEO of 3D Resources Limited (ASX:DDD) in 2010, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also assess whether 3D Resources pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
View our latest analysis for 3D Resources
Comparing 3D Resources Limited's CEO Compensation With the industry
Our data indicates that 3D Resources Limited has a market capitalization of AU$18m, and total annual CEO compensation was reported as AU$96k for the year to June 2020. We note that's a decrease of 54% compared to last year. Notably, the salary of AU$96k is the entirety of the CEO compensation.
For comparison, other companies in the industry with market capitalizations below AU$259m, reported a median total CEO compensation of AU$308k. That is to say, Peter Mitchell is paid under the industry median. Furthermore, Peter Mitchell directly owns AU$645k worth of shares in the company, implying that they are deeply invested in the company's success.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | AU$96k | AU$207k | 100% |
| Other | - | - | - |
| Total Compensation | AU$96k | AU$207k | 100% |
Talking in terms of the industry, salary represented approximately 69% of total compensation out of all the companies we analyzed, while other remuneration made up 31% of the pie. On a company level, 3D Resources prefers to reward its CEO through a salary, opting not to pay Peter Mitchell through non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
3D Resources Limited's Growth
3D Resources Limited has seen its earnings per share (EPS) increase by 57% a year over the past three years. In the last year, its revenue is up 27%.
Shareholders would be glad to know that the company has improved itself over the last few years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has 3D Resources Limited Been A Good Investment?
With a three year total loss of 50% for the shareholders, 3D Resources Limited would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
To Conclude...
3D Resources rewards its CEO solely through a salary, ignoring non-salary benefits completely. As we touched on above, 3D Resources Limited is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However we must not forget that the EPS growth has been very strong over three years. Considering EPS are on the up, we would say Peter is compensated fairly. But we believe shareholders would want to see healthier returns before the CEO gets a raise.
CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 5 warning signs for 3D Resources (of which 3 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.
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.
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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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About ASX:ADG
Adelong Gold
Engages in the exploration of mineral properties primarily in Western Australia and Brazil.
Medium-low with mediocre balance sheet.
