Stock Analysis

Sunrise Energy Metals Limited's (ASX:SRL) CEO Compensation Is Looking A Bit Stretched At The Moment

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The underwhelming share price performance of Sunrise Energy Metals Limited (ASX:SRL) in the past three years would have disappointed many shareholders. Per share earnings growth is also lacking, despite revenue growth. Shareholders will have a chance to take their concerns to the board at the next AGM on 22 October 2021 and vote on resolutions including executive compensation, which studies show may have an impact on company performance. Here's our take on why we think shareholders might be hesitant about approving a raise at the moment.

Check out our latest analysis for Sunrise Energy Metals

Comparing Sunrise Energy Metals Limited's CEO Compensation With the industry

Our data indicates that Sunrise Energy Metals Limited has a market capitalization of AU$162m, and total annual CEO compensation was reported as AU$903k for the year to June 2021. Notably, that's an increase of 18% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at AU$381k.

For comparison, other companies in the industry with market capitalizations below AU$270m, reported a median total CEO compensation of AU$356k. Hence, we can conclude that Sam Riggall is remunerated higher than the industry median. What's more, Sam Riggall holds AU$4.8m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20212020Proportion (2021)
Salary AU$381k AU$476k 42%
Other AU$522k AU$287k 58%
Total CompensationAU$903k AU$763k100%

Talking in terms of the industry, salary represented approximately 63% of total compensation out of all the companies we analyzed, while other remuneration made up 37% of the pie. In Sunrise Energy Metals' case, non-salary compensation represents a greater slice of total remuneration, 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.

ASX:SRL CEO Compensation October 15th 2021

A Look at Sunrise Energy Metals Limited's Growth Numbers

Over the last three years, Sunrise Energy Metals Limited has shrunk its earnings per share by 63% per year. Its revenue is up 1,893% over the last year.

The decrease in EPS could be a concern for some investors. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Sunrise Energy Metals Limited Been A Good Investment?

With a total shareholder return of -60% over three years, Sunrise Energy Metals Limited shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

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. Shareholders will get the chance at the upcoming AGM to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 3 warning signs for Sunrise Energy Metals (1 is a bit unpleasant!) that you should be aware of before investing here.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

Valuation is complex, but we're helping make it simple.

Find out whether Sunrise Energy Metals is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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