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How Much is Encounter Resources' (ASX:ENR) CEO Getting Paid?

Will Robinson has been the CEO of Encounter Resources Limited (ASX:ENR) since 2004, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Encounter Resources pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Encounter Resources

How Does Total Compensation For Will Robinson Compare With Other Companies In The Industry?

According to our data, Encounter Resources Limited has a market capitalization of AU$74m, and paid its CEO total annual compensation worth AU$353k over the year to June 2020. We note that's an increase of 21% above last year. Notably, the salary which is AU$264.4k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under AU$282m, the reported median total CEO compensation was AU$311k. From this we gather that Will Robinson is paid around the median for CEOs in the industry. Furthermore, Will Robinson directly owns AU$5.7m worth of shares in the company, implying that they are deeply invested in the company's success.

Component

2020

2019

Proportion (2020)

Salary

AU$264k

AU$267k

75%

Other

AU$88k

AU$25k

25%

Total Compensation

AU$353k

AU$293k

100%

On an industry level, around 70% of total compensation represents salary and 30% is other remuneration. There isn't a significant difference between Encounter Resources and the broader market, in terms of salary allocation in the overall compensation package. 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.

ceo-compensation
ceo-compensation

Encounter Resources Limited's Growth

Over the past three years, Encounter Resources Limited has seen its earnings per share (EPS) grow by 29% per year. In the last year, its revenue is down 91%.

Shareholders would be glad to know that the company has improved itself over the last few 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 Encounter Resources Limited Been A Good Investment?

Most shareholders would probably be pleased with Encounter Resources Limited for providing a total return of 192% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

As we touched on above, Encounter 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. The company is growing EPS and total shareholder returns have been pleasing. Indeed, many might consider that Will is compensated rather modestly, given the solid company performance! In fact, shareholders might even think the CEO deserves a raise as a reward due to the fantastic returns generated.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 5 warning signs for Encounter Resources you should be aware of, and 2 of them don't sit too well with us.

Important note: Encounter 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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