David Cates has been the CEO of Denison Mines Corp. (TSE:DML) since 2015. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. 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.
How Does David Cates's Compensation Compare With Similar Sized Companies?
Our data indicates that Denison Mines Corp. is worth CA$319m, and total annual CEO compensation is CA$1.2m. (This is based on the year to December 2018). We think total compensation is more important but we note that the CEO salary is lower, at CA$306k. When we examined a selection of companies with market caps ranging from CA$133m to CA$533m, we found the median CEO total compensation was CA$901k.
Thus we can conclude that David Cates receives more in total compensation than the median of a group of companies in the same market, and of similar size to Denison Mines Corp.. 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 a visual representation of the CEO compensation at Denison Mines, below.
Is Denison Mines Corp. Growing?
Over the last three years Denison Mines Corp. has shrunk its earnings per share by an average of 14% per year (measured with a line of best fit). In the last year, its revenue is up 10%.
Few shareholders would be pleased to read that earnings per share are lower over three years. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that earnings per share has gone backwards over three years. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.
Has Denison Mines Corp. Been A Good Investment?
With a three year total loss of 22%, Denison Mines Corp. would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
We compared total CEO remuneration at Denison Mines Corp. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
Earnings per share have not grown in three years, and the revenue growth fails to impress us.
Over the same period, investors would have come away with nothing in the way of share price gains. This analysis suggests to us that the CEO is paid too generously! So you may want to check if insiders are buying Denison Mines shares with their own money (free access).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.