Here's Why Shareholders May Want To Be Cautious With Increasing Investigator Resources Limited's (ASX:IVR) CEO Pay Packet

Key Insights

• Investigator Resources' Annual General Meeting to take place on 23rd of November
• CEO Andrew McIlwain's total compensation includes salary of AU$350.0k
• Total compensation is 73% above industry average
• Investigator Resources' EPS grew by 79% over the past three years while total shareholder loss over the past three years was 33%

The underwhelming share price performance of Investigator Resources Limited (ASX:IVR) in the past three years would have disappointed many shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. The AGM coming up on the 23rd of November could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

Check out our latest analysis for Investigator Resources

How Does Total Compensation For Andrew McIlwain Compare With Other Companies In The Industry?

According to our data, Investigator Resources Limited has a market capitalization of AU$59m, and paid its CEO total annual compensation worth AU$673k over the year to June 2023. That's a notable increase of 41% on last year. We note that the salary of AU$350.0k makes up a sizeable portion of the 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$388k. Accordingly, our analysis reveals that Investigator Resources Limited pays Andrew McIlwain north of the industry median. What's more, Andrew McIlwain holds AU$429k worth of shares in the company in their own name.

Component	2023	2022	Proportion (2023)
Salary	AU$350k	AU$294k	52%
Other	AU$323k	AU$182k	48%
Total Compensation	AU$673k	AU$476k	100%

Speaking on an industry level, nearly 61% of total compensation represents salary, while the remainder of 39% is other remuneration. In Investigator Resources' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. 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 Investigator Resources Limited's Growth Numbers

Over the past three years, Investigator Resources Limited has seen its earnings per share (EPS) grow by 79% per year. It saw its revenue drop 94% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Investigator Resources Limited Been A Good Investment?

With a total shareholder return of -33% over three years, Investigator Resources Limited shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 5 warning signs for Investigator Resources (of which 2 don't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.

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. 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.