What We Learned About Vast Resources' (LON:VAST) CEO Pay

This article will reflect on the compensation paid to Richard Prelea who has served as CEO of Vast Resources plc (LON:VAST) since 2018. This analysis will also assess whether Vast Resources pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for Vast Resources

How Does Total Compensation For Richard Prelea Compare With Other Companies In The Industry?

Our data indicates that Vast Resources plc has a market capitalization of UK£25m, and total annual CEO compensation was reported as US$226k for the year to April 2020. That's mostly flat as compared to the prior year's compensation. It is worth noting that the CEO compensation consists entirely of the salary, worth US$226k.

For comparison, other companies in the industry with market capitalizations below UK£142m, reported a median total CEO compensation of US$216k. So it looks like Vast Resources compensates Richard Prelea in line with the median for the industry. Furthermore, Richard Prelea directly owns UK£1.9m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, roughly 70% of total compensation represents salary and 30% is other remuneration. At the company level, Vast Resources pays Richard Prelea solely through a salary, preferring to go down a conventional route. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Vast Resources plc's Growth

Vast Resources plc has seen its earnings per share (EPS) increase by 57% a year over the past three years. It saw its revenue drop 97% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Vast Resources plc Been A Good Investment?

Since shareholders would have lost about 78% over three years, some Vast Resources plc investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Vast Resources rewards its CEO solely through a salary, ignoring non-salary benefits completely. As previously discussed, Richard is compensated close to the median for companies of its size, and which belong to the same industry. On the other hand, the company has logged negative shareholder returns over the previous three years. However, EPS growth is positive over the same time frame. It's tough for us to say CEO compensation is too generous when EPS growth is positive, but negative investor returns will irk shareholders and reduce any chances of a raise.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 6 warning signs for Vast Resources you should be aware of, and 2 of them are significant.

Important note: Vast 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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