A Quick Analysis On Resource Mining's (ASX:RMI) CEO Salary

This article will reflect on the compensation paid to Warwick Davies who has served as CEO of Resource Mining Corporation Limited (ASX:RMI) since 2010. This analysis will also assess whether Resource Mining pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Resource Mining

How Does Total Compensation For Warwick Davies Compare With Other Companies In The Industry?

According to our data, Resource Mining Corporation Limited has a market capitalization of AU$5.0m, and paid its CEO total annual compensation worth AU$89k over the year to June 2020. That's a notable increase of 8.7% on last year. It is worth noting that the CEO compensation consists entirely of the salary, worth AU$89k.

For comparison, other companies in the industry with market capitalizations below AU$260m, reported a median total CEO compensation of AU$309k. That is to say, Warwick Davies is paid under the industry median.

On an industry level, roughly 69% of total compensation represents salary and 31% is other remuneration. Speaking on a company level, Resource Mining prefers to tread along a traditional path, disbursing all compensation through a salary. 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.

Resource Mining Corporation Limited's Growth

Over the past three years, Resource Mining Corporation Limited has seen its earnings per share (EPS) grow by 13% per year. It achieved revenue growth of 3.0% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Resource Mining Corporation Limited Been A Good Investment?

With a three year total loss of 29% for the shareholders, Resource Mining Corporation Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Resource Mining rewards its CEO solely through a salary, ignoring non-salary benefits completely. As previously discussed, Warwick is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. However, the EPS growth over three years is certainly impressive. Considering EPS are on the up, we would say Warwick is compensated fairly. But shareholders will likely want to hold off on any raise for Warwick until investor returns are positive.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 4 warning signs for Resource Mining that you should be aware of before investing.

Switching gears from Resource Mining, 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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