Will Dix became the CEO of Todd River Resources Limited (ASX:TRT) in 2018, 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 assess whether Todd River Resources pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing Todd River Resources Limited's CEO Compensation With the industry
At the time of writing, our data shows that Todd River Resources Limited has a market capitalization of AU$16m, and reported total annual CEO compensation of AU$298k for the year to June 2020. We note that's a decrease of 32% compared to last year. In particular, the salary of AU$270.0k, makes up a huge portion of the total compensation being paid to the CEO.
On comparing similar-sized companies in the industry with market capitalizations below AU$283m, we found that the median total CEO compensation was AU$312k. So it looks like Todd River Resources compensates Will Dix in line with the median for the industry.
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. According to our research, Todd River Resources has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
Todd River Resources Limited's Growth
Todd River Resources Limited has seen its earnings per share (EPS) increase by 38% a year over the past three years. It saw its revenue drop 96% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Todd River Resources Limited Been A Good Investment?
Given the total shareholder loss of 70% over three years, many shareholders in Todd River Resources Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
As previously discussed, Will is compensated close to the median for companies of its size, and which belong to the same industry. Meanwhile, shareholder returns paint a sorry picture for the company, finishing in the red over the last three years. However, EPS growth is positive over the same time frame. Overall, we wouldn't say Will is paid an unjustified compensation, but shareholders might not favor a raise before shareholder returns show a positive trend.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 6 warning signs (and 4 which make us uncomfortable) in Todd River Resources we think you should know about.
Important note: Todd River 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.
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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