Shareholders May Not Be So Generous With Regis Resources Limited's (ASX:RRL) CEO Compensation And Here's Why

The underwhelming share price performance of Regis Resources Limited (ASX:RRL) in the past three years would have disappointed many shareholders. Per share earnings growth is also poor, despite revenues growing. Shareholders will have a chance to take their concerns to the board at the next AGM on 24 November 2022 and vote on resolutions including executive compensation, which studies show may have an impact on company performance. Here's why we think shareholders should hold off on a raise for the CEO at the moment.

Our analysis indicates that RRL is potentially undervalued!

Comparing Regis Resources Limited's CEO Compensation With The Industry

According to our data, Regis Resources Limited has a market capitalization of AU$1.4b, and paid its CEO total annual compensation worth AU$1.7m over the year to June 2022. That's a notable increase of 15% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at AU$780k.

On comparing similar companies from the same industry with market caps ranging from AU$590m to AU$2.4b, we found that the median CEO total compensation was AU$1.5m. From this we gather that Jim Beyer is paid around the median for CEOs in the industry. Furthermore, Jim Beyer directly owns AU$583k worth of shares in the company.

Component	2022	2021	Proportion (2022)
Salary	AU$780k	AU$671k	47%
Other	AU$890k	AU$782k	53%
Total Compensation	AU$1.7m	AU$1.5m	100%

On an industry level, roughly 60% of total compensation represents salary and 40% is other remuneration. Regis Resources pays a modest slice of remuneration through salary, as compared 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.

A Look at Regis Resources Limited's Growth Numbers

Over the last three years, Regis Resources Limited has shrunk its earnings per share by 62% per year. In the last year, its revenue is up 24%.

Investors would be a bit wary of companies that have lower EPS But in contrast the revenue growth is strong, suggesting future potential for EPS growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Regis Resources Limited Been A Good Investment?

The return of -56% over three years would not have pleased Regis Resources Limited shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

The loss to shareholders over the past three years is certainly concerning and possibly has something to do with the fact that the company's earnings haven't grown. In the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan is in line with their expectations.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 1 warning sign for Regis Resources that investors should look into moving forward.

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.

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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.