Performance at Reef Casino Trust (ASX:RCT) has not been particularly rosy recently and shareholders will likely be holding CEO Allan Tan and the board accountable for this. At the upcoming AGM on 21 May 2021, shareholders may have the opportunity to influence management to turn the performance around by voting on resolutions such as executive remuneration and other matters. The data we gathered below shows that CEO compensation looks acceptable for now.

View our latest analysis for Reef Casino Trust

How Does Total Compensation For Allan Tan Compare With Other Companies In The Industry?

At the time of writing, our data shows that Reef Casino Trust has a market capitalization of AU$59m, and reported total annual CEO compensation of AU$93k for the year to December 2020. That's a notable increase of 8.3% on last year. It is worth noting that the CEO compensation consists entirely of the salary, worth AU$93k.

For comparison, other companies in the industry with market capitalizations below AU$259m, reported a median total CEO compensation of AU$384k. In other words, Reef Casino Trust pays its CEO lower than the industry median.

On an industry level, roughly 79% of total compensation represents salary and 21% 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 total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Reef Casino Trust's Growth Numbers

Over the last three years, Reef Casino Trust has shrunk its earnings per share by 94% per year. Its revenue is down 18% over the previous year.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. 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 16% over three years, some Reef Casino Trust investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Reef Casino Trust rewards its CEO solely through a salary, ignoring non-salary benefits completely. Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 3 warning signs for Reef Casino Trust (of which 1 makes us a bit uncomfortable!) that you should know about in order to have a holistic understanding of the stock.

Important note: Reef Casino Trust 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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