How Much is Emmerson Resources' (ASX:ERM) CEO Getting Paid?

Rob Bills has been the CEO of Emmerson Resources Limited (ASX:ERM) since 2007, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Emmerson Resources

How Does Total Compensation For Rob Bills Compare With Other Companies In The Industry?

At the time of writing, our data shows that Emmerson Resources Limited has a market capitalization of AU$37m, and reported total annual CEO compensation of AU$511k for the year to June 2020. Notably, that's an increase of 28% over the year before. Notably, the salary which is AU$338.6k, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below AU$260m, reported a median total CEO compensation of AU$311k. Accordingly, our analysis reveals that Emmerson Resources Limited pays Rob Bills north of the industry median. Furthermore, Rob Bills directly owns AU$589k worth of shares in the company.

On an industry level, around 69% of total compensation represents salary and 31% is other remuneration. There isn't a significant difference between Emmerson Resources and the broader market, in terms of salary allocation in the overall compensation package. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Emmerson Resources Limited's Growth Numbers

Emmerson Resources Limited has seen its earnings per share (EPS) increase by 60% a year over the past three years. It achieved revenue growth of 75% over the last year.

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. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Emmerson Resources Limited Been A Good Investment?

Given the total shareholder loss of 21% over three years, many shareholders in Emmerson Resources Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we noted earlier, Emmerson Resources pays its CEO higher than the norm for similar-sized companies belonging to the same industry. But the company has impressed with its EPS growth, but we cannot say the same about the uninspiring shareholder returns (over the last three years). Considering overall performance, we can't say Rob is underpaid, in fact compensation is definitely on the higher side.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 3 warning signs for Emmerson Resources you should be aware of, and 1 of them is potentially serious.

Switching gears from Emmerson 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. 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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