What We Learned About Rand Mining's (ASX:RND) CEO Pay

This article will reflect on the compensation paid to Anton Billis who has served as CEO of Rand Mining Limited (ASX:RND) since 2003. This analysis will also assess whether Rand Mining pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Rand Mining

How Does Total Compensation For Anton Billis Compare With Other Companies In The Industry?

According to our data, Rand Mining Limited has a market capitalization of AU$124m, and paid its CEO total annual compensation worth AU$190k over the year to June 2020. That's just a smallish increase of 3.2% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at AU$92k.

For comparison, other companies in the industry with market capitalizations below AU$275m, reported a median total CEO compensation of AU$313k. Accordingly, Rand Mining pays its CEO under the industry median. What's more, Anton Billis holds AU$4.6m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 70% of total compensation represents salary, while the remainder of 30% is other remuneration. It's interesting to note that Rand Mining allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Rand Mining Limited's Growth

Over the last three years, Rand Mining Limited has shrunk its earnings per share by 15% per year. In the last year, its revenue is down 96%.

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. 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 Rand Mining Limited Been A Good Investment?

Rand Mining Limited has generated a total shareholder return of 4.4% over three years, so most shareholders wouldn't be too disappointed. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

As we touched on above, Rand Mining Limited is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Over the last three years, shareholder returns have been unexciting, and EPS growth has fared even worse. So, although we can't say CEO compensation is very high, shareholders might want to see an improvement in overall performance before agreeing that Anton deserves a bump.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 3 warning signs for Rand Mining that investors should be aware of in a dynamic business environment.

Important note: Rand Mining 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. 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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