Our View On Walkabout Resources' (ASX:WKT) CEO Pay
The CEO of Walkabout Resources Limited (ASX:WKT) is Trevor Benson, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Check out our latest analysis for Walkabout Resources
Comparing Walkabout Resources Limited's CEO Compensation With the industry
According to our data, Walkabout Resources Limited has a market capitalization of AU$61m, and paid its CEO total annual compensation worth AU$274k over the year to June 2020. That's a slight decrease of 4.8% on the prior year. In particular, the salary of AU$250.0k, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the industry with market capitalizations under AU$279m, the reported median total CEO compensation was AU$311k. This suggests that Walkabout Resources remunerates its CEO largely in line with the industry average. What's more, Trevor Benson holds AU$410k worth of shares in the company in their own name.
Component | 2020 | 2019 | Proportion (2020) |
Salary | AU$250k | AU$250k | 91% |
Other | AU$24k | AU$37k | 9% |
Total Compensation | AU$274k | AU$287k | 100% |
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. Walkabout Resources is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Walkabout Resources Limited's Growth
Over the last three years, Walkabout Resources Limited has shrunk its earnings per share by 6.1% per year. In the last year, its revenue is up 55%.
Investors would be a bit wary of companies that have lower EPS But in contrast the revenue growth is strong, suggesting future potential for EPS growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 Walkabout Resources Limited Been A Good Investment?
Most shareholders would probably be pleased with Walkabout Resources Limited for providing a total return of 153% 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 previously discussed, Trevor is compensated close to the median for companies of its size, and which belong to the same industry. Investors will be happy that Walkabout Resources has produced strong shareholder returns for the past three years. Revenues have also showed some positive momentum, recently. On a worrying note, its important to acknowledge that EPS growth has been negative recently. However, considering overall positive performance, we think Trevor, shareholders might not be too worried about the CEO's compensation.
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 5 warning signs (and 3 which make us uncomfortable) in Walkabout Resources we think you should know about.
Important note: Walkabout 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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