Here's Why Shareholders Should Examine Ramelius Resources Limited's (ASX:RMS) CEO Compensation Package More Closely

Key Insights

• Ramelius Resources will host its Annual General Meeting on 23rd of November
• CEO Mark Zeptner's total compensation includes salary of AU$780.8k
• Total compensation is similar to the industry average
• Ramelius Resources' EPS declined by 31% over the past three years while total shareholder loss over the past three years was 12%

Shareholders will probably not be too impressed with the underwhelming results at Ramelius Resources Limited (ASX:RMS) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 23rd of November. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. The data we present below explains why we think CEO compensation is not consistent with recent performance.

See our latest analysis for Ramelius Resources

How Does Total Compensation For Mark Zeptner Compare With Other Companies In The Industry?

At the time of writing, our data shows that Ramelius Resources Limited has a market capitalization of AU$1.8b, and reported total annual CEO compensation of AU$1.7m for the year to June 2023. That's a notable increase of 17% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at AU$781k.

On examining similar-sized companies in the Australian Metals and Mining industry with market capitalizations between AU$615m and AU$2.5b, we discovered that the median CEO total compensation of that group was AU$1.5m. So it looks like Ramelius Resources compensates Mark Zeptner in line with the median for the industry. Moreover, Mark Zeptner also holds AU$7.2m worth of Ramelius Resources stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	AU$781k	AU$743k	45%
Other	AU$941k	AU$731k	55%
Total Compensation	AU$1.7m	AU$1.5m	100%

Talking in terms of the industry, salary represented approximately 61% of total compensation out of all the companies we analyzed, while other remuneration made up 39% of the pie. It's interesting to note that Ramelius Resources allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Ramelius Resources Limited's Growth

Over the last three years, Ramelius Resources Limited has shrunk its earnings per share by 31% per year. Its revenue is up 4.5% over the last year.

Few shareholders would be pleased to read that EPS have declined. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Ramelius Resources Limited Been A Good Investment?

Given the total shareholder loss of 12% over three years, many shareholders in Ramelius Resources Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for Ramelius Resources that investors should be aware of in a dynamic business environment.

Important note: Ramelius 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.