The CEO of Reef Casino Trust (ASX:RCT) is Allan Tan, 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 Reef Casino Trust.
Comparing Reef Casino Trust's CEO Compensation With the industry
Our data indicates that Reef Casino Trust has a market capitalization of AU$49m, and total annual CEO compensation was reported as AU$86k for the year to December 2019. That's a slight decrease of 5.4% on the prior year. Notably, the salary of AU$86k is the entirety of the CEO compensation.
For comparison, other companies in the industry with market capitalizations below AU$273m, reported a median total CEO compensation of AU$529k. That is to say, Allan Tan is paid under the industry median.
On an industry level, around 75% of total compensation represents salary and 25% is other remuneration. On a company level, Reef Casino Trust prefers to reward its CEO through a salary, opting not to pay Allan Tan through non-salary benefits. 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.
Reef Casino Trust's Growth
Over the last three years, Reef Casino Trust has shrunk its earnings per share by 99% per year. In the last year, its revenue is down 28%.
Overall this is not a very positive result for shareholders. 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 Reef Casino Trust Been A Good Investment?
Since shareholders would have lost about 21% over three years, some Reef Casino Trust investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.
Reef Casino Trust rewards its CEO solely through a salary, ignoring non-salary benefits completely. As we noted earlier, Reef Casino Trust pays its CEO lower than the norm for similar-sized companies belonging to the same industry. While we are quite underwhelmed with EPS growth, the shareholder returns over the past three years have also failed to impress us. It's tough to say that Allan is earning a very high compensation, but shareholders will likely want to see healthier investor returns before agreeing that a raise is in order.
CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 3 warning signs (and 2 which shouldn't be ignored) in Reef Casino Trust we think you should know about.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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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