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In 2006 Tony Jensen was appointed CEO of Royal Gold, Inc. (NASDAQ:RGLD). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Tony Jensen's Compensation Compare With Similar Sized Companies?
Our data indicates that Royal Gold, Inc. is worth US$6.2b, and total annual CEO compensation is US$3.9m. (This figure is for the year to June 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$750k. When we examined a selection of companies with market caps ranging from US$4.0b to US$12b, we found the median CEO total compensation was US$6.4m.
Most shareholders would consider it a positive that Tony Jensen takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. Though positive, it's important we delve into the performance of the actual business.
You can see, below, how CEO compensation at Royal Gold has changed over time.
Is Royal Gold, Inc. Growing?
Royal Gold, Inc. has reduced its earnings per share by an average of 35% a year, over the last three years (measured with a line of best fit). It saw its revenue drop -3.2% over the last year.
Unfortunately, earnings per share have trended lower over the last three years. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. You might want to check this free visual report on analyst forecasts for future earnings.
Has Royal Gold, Inc. Been A Good Investment?
I think that the total shareholder return of 74%, over three years, would leave most Royal Gold, Inc. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
Royal Gold, Inc. is currently paying its CEO below what is normal for companies of its size.
Tony Jensen receives relatively low remuneration compared to similar sized companies. And while the company isn't growing earnings per share, total returns have been pleasing. So, while it would be nice to have EPS growth, on our analysis the CEO compensation is not an issue. Whatever your view on compensation, you might want to check if insiders are buying or selling Royal Gold shares (free trial).
If you want to buy a stock that is better than Royal Gold, this free list of high return, low debt companies is a great place to look.
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 firstname.lastname@example.org. 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.