How Is Rumble Resources' (ASX:RTR) CEO Compensated?

Shane Sikora became the CEO of Rumble Resources Limited (ASX:RTR) in 2013, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Rumble Resources

How Does Total Compensation For Shane Sikora Compare With Other Companies In The Industry?

Our data indicates that Rumble Resources Limited has a market capitalization of AU$73m, and total annual CEO compensation was reported as AU$256k for the year to June 2020. We note that's an increase of 17% above last year. Notably, the salary which is AU$200.0k, represents most of the total compensation being paid.

On comparing similar-sized companies in the industry with market capitalizations below AU$280m, we found that the median total CEO compensation was AU$312k. So it looks like Rumble Resources compensates Shane Sikora in line with the median for the industry. What's more, Shane Sikora holds AU$1.0m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Talking in terms of the industry, salary represented approximately 70% of total compensation out of all the companies we analyzed, while other remuneration made up 30% of the pie. Rumble Resources pays out 78% of remuneration in the form of a salary, significantly higher than the industry average. 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

Over the past three years, Rumble Resources Limited has seen its earnings per share (EPS) grow by 27% per year. Its revenue is down 29% over the previous 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. 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 81% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same 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. Investors would surely be happy to see that returns have been great, and that EPS is up. So one could argue that CEO compensation is quite modest, if you consider 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. In our study, we found 4 warning signs for Rumble Resources you should be aware of, and 1 of them is a bit unpleasant.

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.

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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