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Mel Palancian has been the CEO of Red River Resources Limited (ASX:RVR) since 2015. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for Red River Resources
How Does Mel Palancian's Compensation Compare With Similar Sized Companies?
According to our data, Red River Resources Limited has a market capitalization of AU$91m, and pays its CEO total annual compensation worth AU$654k. (This is based on the year to June 2018). While we always look at total compensation first, we note that the salary component is less, at AU$450k. We took a group of companies with market capitalizations below AU$289m, and calculated the median CEO total compensation to be AU$356k.
Thus we can conclude that Mel Palancian receives more in total compensation than the median of a group of companies in the same market, and of similar size to Red River Resources Limited. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at Red River Resources has changed over time.
Is Red River Resources Limited Growing?
Over the last three years Red River Resources Limited has grown its earnings per share (EPS) by an average of 25% per year (using a line of best fit). Its revenue is up 292% over last year.
This shows that the company has improved itself over the last few years. Good news for shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. It could be important to check this free visual depiction of what analysts expect for the future.
Has Red River Resources Limited Been A Good Investment?
Boasting a total shareholder return of 52% over three years, Red River Resources Limited has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary...
We compared the total CEO remuneration paid by Red River Resources Limited, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.