Here's Why Nickel Industries Limited's (ASX:NIC) CEO Might See A Pay Rise Soon

Key Insights

• Nickel Industries will host its Annual General Meeting on 31st of May
• CEO Justin Werner's total compensation includes salary of US$582.8k
• The total compensation is 67% less than the average for the industry
• Over the past three years, Nickel Industries' EPS fell by 21% and over the past three years, the total shareholder return was 11%

The decent performance at Nickel Industries Limited (ASX:NIC) recently will please most shareholders as they go into the AGM coming up on 31st of May. They will probably be more interested in hearing the board discuss future initiatives to further improve the business as they vote on resolutions such as executive remuneration. Here is our take on why we think CEO compensation is fair and may even warrant a raise.

Check out our latest analysis for Nickel Industries

Comparing Nickel Industries Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Nickel Industries Limited has a market capitalization of AU$4.2b, and reported total annual CEO compensation of US$618k for the year to December 2023. That's a notable increase of 9.8% on last year. Notably, the salary which is US$582.8k, represents most of the total compensation being paid.

For comparison, other companies in the Australian Metals and Mining industry with market capitalizations ranging between AU$3.0b and AU$9.6b had a median total CEO compensation of US$1.9m. That is to say, Justin Werner is paid under the industry median. Furthermore, Justin Werner directly owns AU$32m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	US$583k	US$563k	94%
Other	US$35k	-	6%
Total Compensation	US$618k	US$563k	100%

On an industry level, around 64% of total compensation represents salary and 36% is other remuneration. According to our research, Nickel Industries has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Nickel Industries Limited's Growth

Over the last three years, Nickel Industries Limited has shrunk its earnings per share by 21% per year. It achieved revenue growth of 54% over the last year.

Investors would be a bit wary of companies that have lower EPS But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Nickel Industries Limited Been A Good Investment?

Nickel Industries Limited has served shareholders reasonably well, with a total return of 11% over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

Overall, the company hasn't done too poorly performance-wise, but we would like to see some improvement. If it manages to keep up the current streak, CEO remuneration could well be one of shareholders' least concerns. Rather, investors would more likely want to engage on discussions related to key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 3 warning signs for Nickel Industries that investors should look into moving forward.

Switching gears from Nickel Industries, 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. 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.