Should Shareholders Have Second Thoughts About A Pay Rise For De Grey Mining Limited's (ASX:DEG) CEO This Year?

Key Insights

• De Grey Mining's Annual General Meeting to take place on 23rd of November
• Salary of AU$552.5k is part of CEO Glenn R. Jardine's total remuneration
• The total compensation is 36% less than the average for the industry
• De Grey Mining's three-year loss to shareholders was 1.3% while its EPS was down 38% over the past three years

The disappointing performance at De Grey Mining Limited (ASX:DEG) will make some shareholders rather disheartened. The next AGM coming up on 23rd of November will be a chance for shareholders to have their concerns addressed by the board, challenge management on company strategy and vote on resolutions such as executive remuneration, which may help change the company's future prospects. From our analysis below, we think CEO compensation looks appropriate for now.

See our latest analysis for De Grey Mining

Comparing De Grey Mining Limited's CEO Compensation With The Industry

At the time of writing, our data shows that De Grey Mining Limited has a market capitalization of AU$2.2b, and reported total annual CEO compensation of AU$1.3m for the year to June 2023. We note that's an increase of 49% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at AU$553k.

In comparison with other companies in the Australian Metals and Mining industry with market capitalizations ranging from AU$1.5b to AU$4.9b, the reported median CEO total compensation was AU$1.9m. Accordingly, De Grey Mining pays its CEO under the industry median. Furthermore, Glenn R. Jardine directly owns AU$885k worth of shares in the company.

Component	2023	2022	Proportion (2023)
Salary	AU$553k	AU$473k	44%
Other	AU$698k	AU$366k	56%
Total Compensation	AU$1.3m	AU$839k	100%

Speaking on an industry level, nearly 61% of total compensation represents salary, while the remainder of 39% is other remuneration. In De Grey Mining's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

De Grey Mining Limited's Growth

Over the last three years, De Grey Mining Limited has shrunk its earnings per share by 38% per year. In the last year, its revenue is down 71%.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has De Grey Mining Limited Been A Good Investment?

Given the total shareholder loss of 1.3% over three years, many shareholders in De Grey Mining Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 4 warning signs for De Grey Mining you should be aware of, and 1 of them is potentially serious.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.