Gold Road Resources Limited's (ASX:GOR) CEO Will Probably Have Their Compensation Approved By Shareholders

It would be hard to discount the role that CEO Duncan Gibbs has played in delivering the impressive results at Gold Road Resources Limited (ASX:GOR) recently. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 27 May 2021. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.

See our latest analysis for Gold Road Resources

Comparing Gold Road Resources Limited's CEO Compensation With the industry

At the time of writing, our data shows that Gold Road Resources Limited has a market capitalization of AU$1.2b, and reported total annual CEO compensation of AU$1.3m for the year to December 2020. That's a modest increase of 5.0% on the prior year. While we always look at total compensation first, our analysis shows that the salary component is less, at AU$523k.

In comparison with other companies in the industry with market capitalizations ranging from AU$516m to AU$2.1b, the reported median CEO total compensation was AU$1.2m. So it looks like Gold Road Resources compensates Duncan Gibbs in line with the median for the industry. Moreover, Duncan Gibbs also holds AU$867k worth of Gold Road Resources stock directly under their own name.

Component	2020	2019	Proportion (2020)
Salary	AU$523k	AU$479k	41%
Other	AU$744k	AU$727k	59%
Total Compensation	AU$1.3m	AU$1.2m	100%

On an industry level, roughly 69% of total compensation represents salary and 31% is other remuneration. Gold Road Resources sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Gold Road Resources Limited's Growth Numbers

Gold Road Resources Limited has seen its earnings per share (EPS) increase by 111% a year over the past three years. It achieved revenue growth of 287% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. 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 Gold Road Resources Limited Been A Good Investment?

Boasting a total shareholder return of 96% over three years, Gold Road Resources Limited has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Seeing that company performance has been quite good recently, some shareholders may feel that CEO compensation may not be the biggest focus in the upcoming AGM. However, despite the strong growth in earnings and share price growth, the focus for shareholders would be how the company plans to steer the company towards sustainable profitability in the near future.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Gold Road Resources that you should be aware of before investing.

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.

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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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