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Is Fortuna Silver Mines Inc.'s (TSE:FVI) CEO Paid At A Competitive Rate?

Simply Wall St

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Jorge Ganoza Durant became the CEO of Fortuna Silver Mines Inc. (TSE:FVI) in 2008. 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. This method should give us information to assess how appropriately the company pays the CEO.

Check out our latest analysis for Fortuna Silver Mines

How Does Jorge Ganoza Durant's Compensation Compare With Similar Sized Companies?

According to our data, Fortuna Silver Mines Inc. has a market capitalization of CA$668m, and pays its CEO total annual compensation worth US$5.5m. (This number is for the twelve months until December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$600k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$200m to US$800m. The median total CEO compensation was US$1.1m.

It would therefore appear that Fortuna Silver Mines Inc. pays Jorge Ganoza Durant more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration 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 Fortuna Silver Mines has changed from year to year.

TSX:FVI CEO Compensation, July 17th 2019

Is Fortuna Silver Mines Inc. Growing?

Over the last three years Fortuna Silver Mines Inc. has grown its earnings per share (EPS) by an average of 58% per year (using a line of best fit). Its revenue is down -8.0% over last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. 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 Fortuna Silver Mines Inc. Been A Good Investment?

With a three year total loss of 62%, Fortuna Silver Mines Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

We examined the amount Fortuna Silver Mines Inc. pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. While EPS is positive, we'd say shareholders would want better returns before the CEO is paid much more. So you may want to check if insiders are buying Fortuna Silver Mines shares with their own money (free access).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.

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. Thank you for reading.