How Is Golden Valley Mines' (CVE:GZZ) CEO Compensated?
Glenn Mullan became the CEO of Golden Valley Mines Ltd. (CVE:GZZ) in 2000, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Golden Valley Mines.
See our latest analysis for Golden Valley Mines
Comparing Golden Valley Mines Ltd.'s CEO Compensation With the industry
Our data indicates that Golden Valley Mines Ltd. has a market capitalization of CA$102m, and total annual CEO compensation was reported as CA$319k for the year to December 2019. We note that's a decrease of 33% compared to last year. In particular, the salary of CA$225.0k, makes up a huge portion of the total compensation being paid to the CEO.
For comparison, other companies in the industry with market capitalizations below CA$264m, reported a median total CEO compensation of CA$157k. Hence, we can conclude that Glenn Mullan is remunerated higher than the industry median. What's more, Glenn Mullan holds CA$3.8m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2019 | 2018 | Proportion (2019) |
Salary | CA$225k | CA$225k | 70% |
Other | CA$94k | CA$250k | 30% |
Total Compensation | CA$319k | CA$475k | 100% |
On an industry level, roughly 84% of total compensation represents salary and 16% is other remuneration. It's interesting to note that Golden Valley Mines allocates a smaller portion of compensation to salary in comparison to the broader industry. 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.
Golden Valley Mines Ltd.'s Growth
Over the past three years, Golden Valley Mines Ltd. has seen its earnings per share (EPS) grow by 76% per year. Its revenue is up 550% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Golden Valley Mines Ltd. Been A Good Investment?
Most shareholders would probably be pleased with Golden Valley Mines Ltd. for providing a total return of 147% over three years. 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...
As we noted earlier, Golden Valley Mines pays its CEO higher than the norm for similar-sized companies belonging to the same industry. Importantly though, EPS growth and shareholder returns are very impressive over the last three years. Considering such exceptional results for the company, we'd venture to say CEO compensation is fair. The pleasing shareholder returns are the cherry on top. We wouldn't be wrong in saying that shareholders feel that Glenn's performance creates value for the company.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 4 warning signs for Golden Valley Mines (of which 1 doesn't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.
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.
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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