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Does GobiMin Inc.'s (CVE:GMN) CEO Pay Compare Well With Peers?

Simply Wall St

The CEO of GobiMin Inc. (CVE:GMN) is Felipe Tan. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. 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.

View our latest analysis for GobiMin

How Does Felipe Tan's Compensation Compare With Similar Sized Companies?

Our data indicates that GobiMin Inc. is worth CA$14m, and total annual CEO compensation was reported as CA$370k for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at CA$337k. We took a group of companies with market capitalizations below CA$281m, and calculated the median CEO total compensation to be CA$225k.

Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of GobiMin. Talking in terms of the sector, salary represented approximately 50% of total compensation out of all the companies we analysed, while other remuneration made up 50% of the pie. It's interesting to note that GobiMin pays out a greater portion of remuneration through salary, in comparison to the wider industry.

Thus we can conclude that Felipe Tan receives more in total compensation than the median of a group of companies in the same market, and of similar size to GobiMin Inc.. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous. The graphic below shows how CEO compensation at GobiMin has changed from year to year.

TSXV:GMN CEO Compensation March 30th 2020

Is GobiMin Inc. Growing?

GobiMin Inc. has reduced its earnings per share by an average of 83% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 224%.

As investors, we are a bit wary of companies that have lower earnings per share, over three years. But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Although we don't have analyst forecasts shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has GobiMin Inc. Been A Good Investment?

Since shareholders would have lost about 46% over three years, some GobiMin Inc. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We compared total CEO remuneration at GobiMin Inc. 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.

Over the last three years, shareholder returns have been downright disappointing, and the underlying business has failed to impress us. Although we'd stop short of calling it inappropriate, we think the CEO compensation is probably more on the generous side of things. Taking a breather from CEO compensation, we've spotted 4 warning signs for GobiMin (of which 2 don't sit too well with us!) you should know about in order to have a holistic understanding of the stock.

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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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.

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. Thank you for reading.