Here's Why Shareholders Should Examine DGR Global Limited's (ASX:DGR) CEO Compensation Package More Closely

Key Insights

• DGR Global to hold its Annual General Meeting on 24th of November
• CEO Nick Mather's total compensation includes salary of AU$397.2k
• Total compensation is similar to the industry average
• DGR Global's EPS declined by 38% over the past three years while total shareholder loss over the past three years was 75%

Shareholders will probably not be too impressed with the underwhelming results at DGR Global Limited (ASX:DGR) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 24th of November. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.

Check out our latest analysis for DGR Global

Comparing DGR Global Limited's CEO Compensation With The Industry

At the time of writing, our data shows that DGR Global Limited has a market capitalization of AU$21m, and reported total annual CEO compensation of AU$417k for the year to June 2023. We note that's an increase of 19% above last year. We note that the salary portion, which stands at AU$397.2k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the Australian Metals and Mining industry with market capitalizations under AU$307m, the reported median total CEO compensation was AU$387k. So it looks like DGR Global compensates Nick Mather in line with the median for the industry. Moreover, Nick Mather also holds AU$1.2m worth of DGR Global stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	AU$397k	AU$300k	95%
Other	AU$20k	AU$50k	5%
Total Compensation	AU$417k	AU$350k	100%

Speaking on an industry level, nearly 62% of total compensation represents salary, while the remainder of 38% is other remuneration. Investors will find it interesting that DGR Global pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

DGR Global Limited's Growth

Over the last three years, DGR Global Limited has shrunk its earnings per share by 38% per year. In the last year, its revenue is down 40%.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has DGR Global Limited Been A Good Investment?

The return of -75% over three years would not have pleased DGR Global Limited shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

DGR Global pays its CEO a majority of compensation through a salary. Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 4 warning signs for DGR Global (3 can't be ignored!) that you should be aware of before investing here.

Switching gears from DGR Global, 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.

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.