It Looks Like Shareholders Would Probably Approve Grange Resources Limited's (ASX:GRR) CEO Compensation Package

The performance at Grange Resources Limited (ASX:GRR) has been quite strong recently and CEO Honglin Zhao has played a role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 24 May 2021. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. Here is our take on why we think CEO compensation is not extravagant.

Check out our latest analysis for Grange Resources

How Does Total Compensation For Honglin Zhao Compare With Other Companies In The Industry?

Our data indicates that Grange Resources Limited has a market capitalization of AU$596m, and total annual CEO compensation was reported as AU$888k for the year to December 2020. This means that the compensation hasn't changed much from last year. We note that the salary of AU$526.7k makes up a sizeable portion of the total compensation received by the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between AU$257m and AU$1.0b had a median total CEO compensation of AU$927k. So it looks like Grange Resources compensates Honglin Zhao in line with the median for the industry. Furthermore, Honglin Zhao directly owns AU$682k worth of shares in the company.

Component

2020

2019

Proportion (2020)

Salary

AU$527k

AU$512k

59%

Other

AU$361k

AU$400k

41%

Total Compensation

AU$888k

AU$911k

100%

Speaking on an industry level, nearly 69% of total compensation represents salary, while the remainder of 31% is other remuneration. Grange Resources sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion – which is generally tied to performance, is lower.

ceo-compensationceo-compensation
ceo-compensation

A Look at Grange Resources Limited's Growth Numbers

Grange Resources Limited's earnings per share (EPS) grew 50% per year over the last three years. Its revenue is up 43% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Grange Resources Limited Been A Good Investment?

We think that the total shareholder return of 290%, over three years, would leave most Grange Resources Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude…

Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 2 warning signs for Grange Resources that investors should look into moving forward.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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 editorial-team (at) simplywallst.com.

By Matt Earle

Matthew Earle is the Founder of MiningFeeds. In 2005, Matt founded MiningNerds.com to provide data and information to the mining investment community. This site was merged with Highgrade Review to form MiningFeeds. Matt has a B.Sc. degree with a minor in geology from the University of Toronto.

If you would like to receive our free newsletter via email, simply enter your email address below & click subscribe.

MOST ACTIVE MINING STOCKS

 Daily Gainers

 Lincoln Minerals Limited LML.AX +125.00%
 Golden Cross Resources Ltd. GCR.AX +33.33%
 Casa Minerals Inc. CASA.V +30.00%
 Astro Resources NL ARO.AX +25.00%
 Athena Resources Ltd. AHN.AX +22.22%
 Adavale Resources Limited ADD.AX +22.22%
 Azimut Exploration Inc. AZM.V +21.98%
 New Stratus Energy Inc. NSE.V +21.05%
 Dynasty Gold Corp. DYG.V +18.42%
 Azincourt Energy Corp. AAZ.V +18.18%