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Is Dundee Precious Metals Inc.'s (TSE:DPM) CEO Being Overpaid?

Simply Wall St

Rick Howes has been the CEO of Dundee Precious Metals Inc. (TSE:DPM) since 2013. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Dundee Precious Metals

How Does Rick Howes's Compensation Compare With Similar Sized Companies?

According to our data, Dundee Precious Metals Inc. has a market capitalization of CA$1.1b, and paid its CEO total annual compensation worth US$2.9m over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$674k. We note that more than half of the total compensation is not the salary; and performance requirements may apply to this non-salary portion. When we examined a selection of companies with market caps ranging from CA$528m to CA$2.1b, we found the median CEO total compensation was CA$2.2m.

As you can see, Rick Howes is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Dundee Precious Metals Inc. is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see a visual representation of the CEO compensation at Dundee Precious Metals, below.

TSX:DPM CEO Compensation, December 14th 2019

Is Dundee Precious Metals Inc. Growing?

On average over the last three years, Dundee Precious Metals Inc. has grown earnings per share (EPS) by 106% each year (using a line of best fit). Its revenue is down 6.8% over last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. You might want to check this free visual report on analyst forecasts for future earnings.

Has Dundee Precious Metals Inc. Been A Good Investment?

I think that the total shareholder return of 202%, over three years, would leave most Dundee Precious Metals 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.

In Summary...

We compared total CEO remuneration at Dundee Precious Metals Inc. with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.

However we must not forget that the EPS growth has been very strong over three years. On top of that, in the same period, returns to shareholders have been great. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Dundee Precious Metals.

Important note: Dundee Precious Metals may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE 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.

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