Here's Why It's Unlikely That Image Resources NL's (ASX:IMA) CEO Will See A Pay Rise This Year

Key Insights

• Image Resources will host its Annual General Meeting on 28th of May
• CEO Patrick Mutz's total compensation includes salary of AU$597.8k
• The total compensation is 150% higher than the average for the industry
• Image Resources' three-year loss to shareholders was 48% while its EPS was down 50% over the past three years

Image Resources NL (ASX:IMA) has not performed well recently and CEO Patrick Mutz will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 28th of May. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. From our analysis, we think CEO compensation may need a review in light of the recent performance.

See our latest analysis for Image Resources

How Does Total Compensation For Patrick Mutz Compare With Other Companies In The Industry?

According to our data, Image Resources NL has a market capitalization of AU$92m, and paid its CEO total annual compensation worth AU$966k over the year to December 2023. Notably, that's an increase of 22% over the year before. In particular, the salary of AU$597.8k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the Australian Metals and Mining industry with market capitalizations below AU$300m, reported a median total CEO compensation of AU$386k. Accordingly, our analysis reveals that Image Resources NL pays Patrick Mutz north of the industry median. Moreover, Patrick Mutz also holds AU$495k worth of Image Resources stock directly under their own name.

Component	2023	2022	Proportion (2023)
Salary	AU$598k	AU$530k	62%
Other	AU$368k	AU$259k	38%
Total Compensation	AU$966k	AU$789k	100%

Talking in terms of the industry, salary represented approximately 64% of total compensation out of all the companies we analyzed, while other remuneration made up 36% of the pie. Our data reveals that Image Resources allocates salary more or less in line with the wider market. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Image Resources NL's Growth Numbers

Image Resources NL has reduced its earnings per share by 50% a year over the last three years. Its revenue is down 31% over the previous year.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet 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 Image Resources NL Been A Good Investment?

The return of -48% over three years would not have pleased Image Resources NL shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO 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 3 warning signs for Image Resources you should be aware of, and 1 of them is significant.

Important note: Image Resources is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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.