John McCluskey became the CEO of Alamos Gold Inc. (TSE:AGI) in 2015. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does John McCluskey's Compensation Compare With Similar Sized Companies?
Our data indicates that Alamos Gold Inc. is worth CA$3.1b, and total annual CEO compensation was reported as US$2.6m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$618k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We looked at a group of companies with market capitalizations from US$1.0b to US$3.2b, and the median CEO total compensation was US$2.2m.
So John McCluskey is paid around the average of the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.
You can see a visual representation of the CEO compensation at Alamos Gold, below.
Is Alamos Gold Inc. Growing?
On average over the last three years, Alamos Gold Inc. has grown earnings per share (EPS) by 10% each year (using a line of best fit). It achieved revenue growth of 1.5% 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. It could be important to check this free visual depiction of what analysts expect for the future.
Has Alamos Gold Inc. Been A Good Investment?
With a three year total loss of 28%, Alamos Gold Inc. would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
John McCluskey is paid around what is normal the leaders of comparable size companies.
We like that the company is growing EPS, but we cannot say the same about the lacklustre shareholder returns (over the last three years). Considering the the positives we don't think the CEO pays is too high, but it's certainly hard to argue it is too low. Whatever your view on compensation, you might want to check if insiders are buying or selling Alamos Gold shares (free trial).
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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