In 2014 Nick Brodie was appointed CEO of Galane Gold Ltd. (CVE:GG). 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. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Nick Brodie's Compensation Compare With Similar Sized Companies?
Our data indicates that Galane Gold Ltd. is worth CA$10m, and total annual CEO compensation is US$1.0m. (This number is for the twelve months until December 2017). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$422k. We looked at a group of companies with market capitalizations under CA$268m, and the median CEO total compensation was CA$142k.
As you can see, Nick Brodie is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Galane Gold Ltd. is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see a visual representation of the CEO compensation at Galane Gold, below.
Is Galane Gold Ltd. Growing?
Galane Gold Ltd. has increased its earnings per share (EPS) by an average of 83% a year, over the last three years (using a line of best fit). Its revenue is up 29% over last year.
This demonstrates that the company has been improving recently. A good result. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Galane Gold Ltd. Been A Good Investment?
Given the total loss of 33% over three years, many shareholders in Galane Gold Ltd. are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We examined the amount Galane Gold Ltd. pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. However, the returns to investors are far less impressive, over the same period. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. Shareholders may want to check for free if Galane Gold insiders are buying or selling shares.
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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