Does Traka Resources' (ASX:TKL) CEO Salary Compare Well With Industry Peers?

The CEO of Traka Resources Limited (ASX:TKL) is Patrick Verbeek, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Traka Resources.

Check out our latest analysis for Traka Resources

How Does Total Compensation For Patrick Verbeek Compare With Other Companies In The Industry?

At the time of writing, our data shows that Traka Resources Limited has a market capitalization of AU$10m, and reported total annual CEO compensation of AU$262k for the year to June 2020. Notably, that's a decrease of 18% over the year before. In particular, the salary of AU$253.3k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations under AU$259m, the reported median total CEO compensation was AU$307k. So it looks like Traka Resources compensates Patrick Verbeek in line with the median for the industry. Furthermore, Patrick Verbeek directly owns AU$361k worth of shares in the company.

On an industry level, around 69% of total compensation represents salary and 31% is other remuneration. Traka Resources is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Traka Resources Limited's Growth Numbers

Over the last three years, Traka Resources Limited has shrunk its earnings per share by 2.0% per year. It saw its revenue drop 84% over the last year.

A lack of EPS improvement is not good to see. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Traka Resources Limited Been A Good Investment?

Since shareholders would have lost about 74% over three years, some Traka Resources Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

Patrick receives almost all of their compensation through a salary. As we noted earlier, Traka Resources pays its CEO in line with similar-sized companies belonging to the same industry. Meanwhile, EPS growth and shareholder returns have been in the red for the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 6 warning signs for Traka Resources (of which 4 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Important note: Traka Resources is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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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