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Is Gold Resource Corporation's (NYSEMKT:GORO) CEO Overpaid Relative To Its Peers?

Simply Wall St

Jason Reid became the CEO of Gold Resource Corporation (NYSEMKT:GORO) in 2013. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. 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.

Check out our latest analysis for Gold Resource

How Does Jason Reid's Compensation Compare With Similar Sized Companies?

Our data indicates that Gold Resource Corporation is worth US$219m, and total annual CEO compensation was reported as US$1.7m for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$630k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. When we examined a selection of companies with market caps ranging from US$100m to US$400m, we found the median CEO total compensation was US$1.2m.

As you can see, Jason Reid is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Gold Resource Corporation is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see a visual representation of the CEO compensation at Gold Resource, below.

AMEX:GORO CEO Compensation, September 30th 2019

Is Gold Resource Corporation Growing?

Gold Resource Corporation saw earnings per share stay pretty flat over the last three years, albeit with a slight decrease, according to the line of best fit. It saw its revenue drop 15% over the last year.

In the last three years the company has failed to grow earnings per share. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.

Has Gold Resource Corporation Been A Good Investment?

Given the total loss of 53% over three years, many shareholders in Gold Resource Corporation are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We compared the total CEO remuneration paid by Gold Resource Corporation, and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

Earnings per share have not grown in three years, and the revenue growth fails to impress us. Just as bad, share price gains for investors have failed to materialize, over the same period. In our opinion the CEO might be paid too generously! Whatever your view on compensation, you might want to check if insiders are buying or selling Gold Resource shares (free trial).

Important note: Gold Resource 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.

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.