Strandline Resources Limited's (ASX:STA) CEO Will Probably Have Their Compensation Approved By Shareholders

It would be hard to discount the role that CEO Luke Graham has played in delivering the impressive results at Strandline Resources Limited (ASX:STA) recently. Shareholders will have this at the front of their minds in the upcoming AGM on 24 November 2022. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

Check out our latest analysis for Strandline Resources

Comparing Strandline Resources Limited's CEO Compensation With The Industry

At the time of writing, our data shows that Strandline Resources Limited has a market capitalization of AU$594m, and reported total annual CEO compensation of AU$1.0m for the year to June 2022. We note that's an increase of 21% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at AU$475k.

In comparison with other companies in the industry with market capitalizations ranging from AU$301m to AU$1.2b, the reported median CEO total compensation was AU$1.1m. From this we gather that Luke Graham is paid around the median for CEOs in the industry. Furthermore, Luke Graham directly owns AU$6.2m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2022	2021	Proportion (2022)
Salary	AU$475k	AU$385k	47%
Other	AU$528k	AU$445k	53%
Total Compensation	AU$1.0m	AU$831k	100%

Talking in terms of the industry, salary represented approximately 60% of total compensation out of all the companies we analyzed, while other remuneration made up 40% of the pie. It's interesting to note that Strandline Resources allocates a smaller portion of compensation to salary in comparison 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.

Strandline Resources Limited's Growth

Over the past three years, Strandline Resources Limited has seen its earnings per share (EPS) grow by 26% per year. It saw its revenue drop 45% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Strandline Resources Limited Been A Good Investment?

Boasting a total shareholder return of 371% over three years, Strandline Resources Limited has done well by shareholders. 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.

To Conclude...

Some shareholders will probably be more lenient on CEO compensation in the upcoming AGM given the pleasing performance of the company recently. However, despite the strong growth in earnings and share price growth, the focus for shareholders would be how the company plans to steer the company towards sustainable profitability in the near future.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 3 warning signs for Strandline Resources (of which 1 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.

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.