Interest in rare earth mineral and mining companies has hit a crescendo in the last two years. From AI resource demand, to tariffs, to government investment, the attention given to these companies has been warranted.
Alongside the increased demand, investments, and attention for the rare assets of these companies, demand for key leaders has also increased, driving changes to their compensation levels to maintain competitiveness.
Zayla, a leading rare earth and mining compensation consulting firm, recently completed a six year analysis of CEO pay trends for the top 30 highest paid U.S. and Canadian exchange traded companies. From this analysis, Zayla made three major observations.
Observation 1: CEO Compensation has increased 66% over three years
Zayla analyzed the average CEO compensation from 2020-2022 v 2023-2025 proxy seasons. In that three-year average vs three year-average comparison, CEO total direct compensation increased on average 66%. That equates to an annual increase of 18%, significantly higher than the Russell 3,000 annual increase of 9.7%.
This significant increase in compensation is reflective of the demand for talent in the rare earth industry that is coupled with the hypertense labor market in general across the US and Canada, as well as the significant uptick in demand and investment into these companies. Add these confluent influences together and it’s easy to understand why there has been a significant uptick in executive compensation.
Observation 2: CEO Compensation has been volatile
The average annual volatility, calculated as the annual percentage iincrease or decrease, in CEO compensation for these 30 rare earth companies for the prior 6 years was 70%. Additionally, the spread of year of year change in compensation ranged as high as 133% positive to 14% negative. The macro stock market has been anything but mainstream the past 6 years, and then add the financial volatility of rare earth companies along with the increased demand and investment in that same time period, and it’s not a surprise to see such wide ranging changes to executive compensation.
Observation 3: 57% CEO turnover in 6 years
Adding to the significant increase and volatility of CEO compensation for rare earth companies over the past 6 years, is CEO turnover. Of the 30 companies analyzed, 50% changed CEOs. These changes reflect a changing guard in the broader executive market with baby boomer aged executives retiring and becoming replaced by the next generation. Coupled with this macro dynamic are new investors with new money seeking high growth executive teams. As rare earth companies look for strong executive leadership to grow into the next phase, compensation has increased significantly.
Zayla, a Gallagher Company, is a leading compensation advisory firm to the rare earth and mining industry. For any additional questions on this analysis, or compensation questions generally, please contact the team.