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Is Eldorado Gold Corporation's (TSE:ELD) CEO Salary Justified?

Simply Wall St

George Burns has been the CEO of Eldorado Gold Corporation (TSE:ELD) since 2017. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. 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.

View our latest analysis for Eldorado Gold

How Does George Burns's Compensation Compare With Similar Sized Companies?

According to our data, Eldorado Gold Corporation has a market capitalization of CA$1.6b, and paid its CEO total annual compensation worth US$4.0m over the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$1.0m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of CA$1.3b to CA$4.2b. The median total CEO compensation was CA$2.8m.

As you can see, George Burns is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Eldorado Gold Corporation 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, below, how CEO compensation at Eldorado Gold has changed over time.

TSX:ELD CEO Compensation, February 19th 2020
TSX:ELD CEO Compensation, February 19th 2020

Is Eldorado Gold Corporation Growing?

Over the last three years Eldorado Gold Corporation has grown its earnings per share (EPS) by an average of 15% per year (using a line of best fit). It achieved revenue growth of 11% over the last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Shareholders might be interested in this free visualization of analyst forecasts.

Has Eldorado Gold Corporation Been A Good Investment?

With a three year total loss of 59%, Eldorado Gold Corporation would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We compared total CEO remuneration at Eldorado Gold Corporation 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.

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. Considering the per share profit growth, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. Whatever your view on compensation, you might want to check if insiders are buying or selling Eldorado 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.

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.