What Did Ero Copper's (TSE:ERO) CEO Take Home Last Year?
David Strang became the CEO of Ero Copper Corp. (TSE:ERO) in 2016, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
See our latest analysis for Ero Copper
How Does Total Compensation For David Strang Compare With Other Companies In The Industry?
At the time of writing, our data shows that Ero Copper Corp. has a market capitalization of CA$1.7b, and reported total annual CEO compensation of US$2.4m for the year to December 2019. We note that's an increase of 54% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$525k.
In comparison with other companies in the industry with market capitalizations ranging from CA$1.3b to CA$4.2b, the reported median CEO total compensation was US$1.8m. Hence, we can conclude that David Strang is remunerated higher than the industry median. What's more, David Strang holds CA$106m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$525k | US$400k | 22% |
Other | US$1.9m | US$1.2m | 78% |
Total Compensation | US$2.4m | US$1.6m | 100% |
On an industry level, roughly 87% of total compensation represents salary and 13% is other remuneration. In Ero Copper's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Ero Copper Corp.'s Growth
Over the past three years, Ero Copper Corp. has seen its earnings per share (EPS) grow by 75% per year. Its revenue is up 4.9% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Ero Copper Corp. Been A Good Investment?
We think that the total shareholder return of 208%, over three years, would leave most Ero Copper Corp. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary...
As previously discussed, David is compensated more than what is normal for CEOs of companies of similar size, and which belong to the same industry. But EPS growth and shareholder returns have been top-notch for the past three years. Considering such exceptional results for the company, we'd venture to say CEO compensation is fair. And given most shareholders are probably very happy with recent returns, they might even think that David deserves a raise!
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for Ero Copper that investors should think about before committing capital to this stock.
Switching gears from Ero Copper, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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