How Does Rumble Resources' (ASX:RTR) CEO Pay Compare With Company Performance?

This article will reflect on the compensation paid to Shane Sikora who has served as CEO of Rumble Resources Limited (ASX:RTR) since 2013. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for Rumble Resources

Comparing Rumble Resources Limited's CEO Compensation With the industry

At the time of writing, our data shows that Rumble Resources Limited has a market capitalization of AU$67m, and reported total annual CEO compensation of AU$256k for the year to June 2020. Notably, that's an increase of 17% over the year before. We note that the salary portion, which stands at AU$200.0k constitutes the majority of total compensation received by the CEO.

On comparing similar-sized companies in the industry with market capitalizations below AU$259m, we found that the median total CEO compensation was AU$308k. From this we gather that Shane Sikora is paid around the median for CEOs in the industry. Moreover, Shane Sikora also holds AU$1.1m worth of Rumble Resources stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Speaking on an industry level, nearly 69% of total compensation represents salary, while the remainder of 31% is other remuneration. Rumble Resources 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.

Rumble Resources Limited's Growth

Rumble Resources Limited has seen its earnings per share (EPS) increase by 27% a year over the past three years. In the last year, its revenue is down 29%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Rumble Resources Limited Been A Good Investment?

Most shareholders would probably be pleased with Rumble Resources Limited for providing a total return of 96% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

As we touched on above, Rumble Resources Limited is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. The company is growing EPS and total shareholder returns have been pleasing. Indeed, many might consider that Shane is compensated rather modestly, given the solid company performance! Stockholders might even be okay with a bump in pay, seeing as how investor returns have been so strong.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 4 warning signs for Rumble Resources (1 is a bit unpleasant!) that you should be aware of before investing here.

Switching gears from Rumble Resources, 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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