Why We Think Rand Mining Limited's (ASX:RND) CEO Compensation Is Not Excessive At All

Key Insights

• Rand Mining will host its Annual General Meeting on 24th of November
• Total pay for CEO Anton Billis includes AU$95.2k salary
• Total compensation is 73% below industry average
• Rand Mining's three-year loss to shareholders was 18% while its EPS grew by 18% over the past three years

The performance at Rand Mining Limited (ASX:RND) has been rather lacklustre of late and shareholders may be wondering what CEO Anton Billis is planning to do about this. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 24th of November. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. We think CEO compensation looks appropriate given the data we have put together.

View our latest analysis for Rand Mining

Comparing Rand Mining Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Rand Mining Limited has a market capitalization of AU$78m, and reported total annual CEO compensation of AU$105k for the year to June 2023. That's a modest increase of 4.3% on the prior year. We note that the salary portion, which stands at AU$95.2k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the Australian Metals and Mining industry with market capitalizations below AU$308m, we found that the median total CEO compensation was AU$388k. Accordingly, Rand Mining pays its CEO under the industry median. Moreover, Anton Billis also holds AU$3.1m worth of Rand Mining 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$95k	AU$92k	90%
Other	AU$10.0k	AU$9.2k	10%
Total Compensation	AU$105k	AU$101k	100%

On an industry level, roughly 61% of total compensation represents salary and 39% is other remuneration. Rand Mining is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Rand Mining Limited's Growth

Rand Mining Limited has seen its earnings per share (EPS) increase by 18% a year over the past three years. In the last year, its revenue is down 6.0%.

Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. 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?

Given the total shareholder loss of 18% over three years, many shareholders in Rand Mining Limited are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

The loss to shareholders over the past three years is certainly concerning. The share price trend has diverged with the robust growth in EPS however, suggesting there may be other factors that could be driving the price performance. A key focus for the board and management will be how to align the share price with fundamentals. In the upcoming AGM, shareholders should take this opportunity to raise these concerns with the board and revisit their investment thesis with regards to the company.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 3 warning signs (and 1 which can't be ignored) in Rand Mining we think you should know about.

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.

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.