This article will reflect on the compensation paid to Peter Mitchell who has served as CEO of 3D Resources Limited (ASX:DDD) since 2010. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for 3D Resources.
Comparing 3D Resources Limited's CEO Compensation With the industry
At the time of writing, our data shows that 3D Resources Limited has a market capitalization of AU$25m, and reported total annual CEO compensation of AU$96k for the year to June 2020. We note that's a decrease of 54% compared to last year. It is worth noting that the CEO compensation consists entirely of the salary, worth AU$96k.
On comparing similar-sized companies in the industry with market capitalizations below AU$282m, we found that the median total CEO compensation was AU$311k. This suggests that Peter Mitchell is paid below the industry median. Furthermore, Peter Mitchell directly owns AU$1.1m worth of shares in the company, implying that they are deeply invested in the company's success.
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. On a company level, 3D Resources prefers to reward its CEO through a salary, opting not to pay Peter Mitchell through non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at 3D Resources Limited's Growth Numbers
Over the past three years, 3D Resources Limited has seen its earnings per share (EPS) grow by 57% per year. It achieved revenue growth of 27% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has 3D Resources Limited Been A Good Investment?
Given the total shareholder loss of 34% over three years, many shareholders in 3D Resources Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
3D Resources pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. As we noted earlier, 3D Resources pays its CEO lower than the norm for similar-sized companies belonging to the same industry. However, the EPS growth over three years is certainly impressive. Considering EPS are on the up, we would say Peter is compensated fairly. Shareholders, though, would ideally like to see shareholder returns head north before they agree to any raise.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 5 warning signs for 3D Resources (3 are potentially serious!) that you should be aware of before investing here.
Important note: 3D 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email email@example.com.