I like Sap’s sample group selection because it seems a broadly...

I like Sap’s sample group selection because it seems a broadly representative sample of mineral and base metal ASX explorer’s operating in far-flung corners of the globe.

I want to use Sap’s sample group as a benchmark because he/she is probably the most rational, impartial and respected member of the forum. Having said that, I’d be willing to remove or add other companies to the analysis if anyone can suggest a good reason why I should.

Anyway, though I think the sample group of companies is fair, there’s a couple of key differences which should be noted prior to comparing MD remunerations (which as I mentioned, is my key point of contention at this time)

First, not all companies are the same size, ranging from $170m market cap (CDV), down to $3m (OVL). The avg MC is approx. $50m. AZS is one of the smaller ones at $27m. I believe a company’s size is a relevant consideration in determining exec remuneration.

Second. Historical performance of the companies in creating shareholder value varies greatly, ranging from 117% over past several FYs (VAN) down to -35% ROI (AZS). I believe a company’s success in creating shareholder value is another consideration in determining exec remuneration.

So, in the context of this sample group and the timeframes shown, AZS measures up as a comparatively little company with a very poor (the worst in fact) record of value creation.

Ok, let’s now take a look at exec remuneration.

Over the past two years, AZS MD’s total remuneration package has either been the largest, or the second largest, of all MD/CEO’s in the entire sample group.

For example, in the current FY our MD’s total remuneration is broadly similar to the CEO of CDV ($547, 350 vs. $580,681) despite CDV being vastly larger than AZS ($170m vs. $27m), and averaging 33% ROI in the prior two FYs compared to -35% for AZS.

Based on this sample group analysis, the AZS MD is one of the best remunerated executives despite the company being the worst performer in regard to share price and having one of the smaller MCs.

Can anyone please help me to understand why this should be so? In my opinion, it doesn’t seem fair or appropriate. I think our MD remuneration needs to more closely align with industry standards.

Nb. I included all workings in the tables below, including source materials and notes/qualifications to my analysis. Calculations represent best efforts but are provided on a draft basis. If anyone can identify aspects of improvement or correction please let me know.

Btw, I don’t propose to commence mass mail-outs of shareholder correspondence without first giving the company an opportunity to comment on the accuracy and my interpretation of data.