Roland Phelps has been the CEO of Galantas Gold Corporation (CVE:GAL) since 2003, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Galantas Gold.
How Does Total Compensation For Roland Phelps Compare With Other Companies In The Industry?
Our data indicates that Galantas Gold Corporation has a market capitalization of CA$9.8m, and total annual CEO compensation was reported as CA$353k for the year to December 2019. That's mostly flat as compared to the prior year's compensation. In particular, the salary of CA$338.9k, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the industry with market capitalizations under CA$260m, the reported median total CEO compensation was CA$154k. Hence, we can conclude that Roland Phelps is remunerated higher than the industry median. Moreover, Roland Phelps also holds CA$1.5m worth of Galantas Gold stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Speaking on an industry level, nearly 89% of total compensation represents salary, while the remainder of 11% is other remuneration. Investors will find it interesting that Galantas Gold pays the bulk of its rewards through a traditional salary, instead of non-salary benefits. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
A Look at Galantas Gold Corporation's Growth Numbers
Galantas Gold Corporation has seen its earnings per share (EPS) increase by 3.8% a year over the past three years. In the last year, its revenue has collapsed effectively to zero.
We would argue that the lack of revenue growth in the last year is less than ideal, but the modest EPSgrowth gives us some relief. It's hard to reach a conclusion about business performance right now. This may be one to watch. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Galantas Gold Corporation Been A Good Investment?
Given the total shareholder loss of 65% over three years, many shareholders in Galantas Gold Corporation are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
Galantas Gold pays its CEO a majority of compensation through a salary. As we touched on above, Galantas Gold Corporation is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. While we have not been overly impressed by the business performance, the shareholder returns have been utterly depressing, over the last three years. This doesn't look good when you see that Roland is earning more than the industry median. Taking all this into account, it could be hard to get shareholder support for giving Roland a raise.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 5 warning signs for Galantas Gold (4 are significant!) that you should be aware of before investing here.
Switching gears from Galantas Gold, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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