Just one example to begin: a gold exploration company whose share price is a third of what it was earlier this year but whose payments to directors have doubled since the 2011 financial year.
So the shareholders have taken the pain, all of it.
Prompted by some comments from high-profile Canaccord Genuity analyst Warwick Grigor, a man who usually says what he thinks in plain language, I have taken a look at a random selection of exploration companies now that the 2012 annual reports are in.
It is not all bad news.
A trawl through the least valuable juniors shows, in many cases, admirable restraint.
One case taken at random was an iron ore explorer with a market cap below $A3 million whose entire remuneration bill for the year was just $87,000.
But then you find the explorer whose market cap is just $5 million and with a share price that has lost more than two-thirds over the past 52 weeks.
It still managed to find nearly $700,000 for its directors.
There will be no names or identifying features here.
This is in fairness to those singled out; among the 800 listed mining companies, there are bound to be plenty of examples of greater or lesser remuneration restraint, so it seems unreasonable to name those unlucky (or lucky) enough to have been chosen at random.
In his weekly client note, Grigor argues that executive salaries in the resources sector need trimming.
The salaries took off in the bull market when there was a sudden shortage of geologists, senior executives and chief executives.
That meant salaries skyrocketed in many cases.
“Before the boom a good salary for a chief executive officer of a junior company was $200,000 per annum plus options,” wrote Grigor.
“At the peak of the boom, companies were having to bid better than $400,000 for CEOs.”
Times, as he rightly points out, are different now.
“Equity capital is difficult to raise and investors see red when they see how much some of the executives are being paid, particularly when shareholders are losing money,” he said.
Grigor argues that it is time for these salaries to be cut to reflect these difficult times, particularly for those companies that produce no positive cash flow and depend on funds being topped up by shareholders.
“This is a direct transfer of wealth from shareholders to executives and directors,” he said.
“We are in a high-risk market and the pain has to be shared around. Haircuts are in order.”
He wants shareholders to vote against remuneration reports when they feel the directors are overdoing it.
His survey shows that many juniors boosted payments to CEOs in 2012 by up to 30% even though the market was turning down.
Now many companies are having to raise money at very low share prices just to support these inflated salaries.
“Another disturbing point is that many of these guys have termination notice periods of 12-24 months, so it can be expensive to remove them when they are so well entrenched. Good for some,” he added.
By and large, from my own quick sampling, common sense has prevailed in much of “poverty row” – companies capitalised at just a few million are, by and large, watching the pennies but with varying degrees of self-denial.
One stock capitalised at under $3 million had a remuneration bill of just $21,000, another of $171,000, a third of $73,000. All these three are capped at about the same but there are varying degrees of restraint.
Nevertheless, it doesn’t take long to find those companies where directors and CEOs are doing well – and where incentives can add as much as 50% to a salary.
This is a question that has never been convincingly answered to my satisfaction: why incentives?
If $500,000 is not enough to entice a CEO to give his or her all for the company, then find someone who will – without lashings of incentive dollars on top.
