How Much Is Real Energy Corporation Limited (ASX:RLE) Paying Its CEO?
The CEO of Real Energy Corporation Limited (ASX:RLE) is Scott Brown, 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 Real Energy
Comparing Real Energy Corporation Limited's CEO Compensation With the industry
Our data indicates that Real Energy Corporation Limited has a market capitalization of AU$11m, and total annual CEO compensation was reported as AU$329k for the year to June 2020. That is, the compensation was roughly the same as last year. In particular, the salary of AU$250.0k, makes up a huge portion of the total compensation being paid to the CEO.
On comparing similar-sized companies in the industry with market capitalizations below AU$284m, we found that the median total CEO compensation was AU$361k. This suggests that Real Energy remunerates its CEO largely in line with the industry average. What's more, Scott Brown holds AU$922k worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
| Component | 2020 | 2019 | Proportion (2020) |
| Salary | AU$250k | AU$305k | 76% |
| Other | AU$79k | AU$24k | 24% |
| Total Compensation | AU$329k | AU$329k | 100% |
On an industry level, around 73% of total compensation represents salary and 27% is other remuneration. Our data reveals that Real Energy allocates salary more or less in line with the wider market. 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.
Real Energy Corporation Limited's Growth
Over the last three years, Real Energy Corporation Limited has shrunk its earnings per share by 39% per year. Its revenue is down 60% over the previous year.
The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Real Energy Corporation Limited Been A Good Investment?
Since shareholders would have lost about 68% over three years, some Real Energy Corporation Limited investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.