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Is Gran Colombia Gold Corp.'s (TSE:GCM) CEO Paid Enough Relative To Peers?

Simply Wall St

Lombardo Paredes Arenas has been the CEO of Gran Colombia Gold Corp. (TSE:GCM) since 2014. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for Gran Colombia Gold

How Does Lombardo Paredes Arenas's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Gran Colombia Gold Corp. has a market cap of CA$272m, and is paying total annual CEO compensation of US$594k. (This number is for the twelve months until December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$295k. We looked at a group of companies with market capitalizations from US$100m to US$400m, and the median CEO total compensation was US$677k.

So Lombardo Paredes Arenas is paid around the average of the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.

The graphic below shows how CEO compensation at Gran Colombia Gold has changed from year to year.

TSX:GCM CEO Compensation, August 16th 2019

Is Gran Colombia Gold Corp. Growing?

On average over the last three years, Gran Colombia Gold Corp. has grown earnings per share (EPS) by 6.4% each year (using a line of best fit). In the last year, its revenue is up 18%.

I think the revenue growth is good. And the improvement in earnings per share is modest but respectable. So while we'd stop just short of calling this a top performer, but we think it is well worth watching. Shareholders might be interested in this free visualization of analyst forecasts.

Has Gran Colombia Gold Corp. Been A Good Investment?

Most shareholders would probably be pleased with Gran Colombia Gold Corp. for providing a total return of 185% 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...

Lombardo Paredes Arenas is paid around the same as most CEOs of similar size companies.

The company isn't showing particularly great growth, but shareholder returns have been pleasing. So considering most shareholders would be happy, we'd say the CEO pay is appropriate. Shareholders may want to check for free if Gran Colombia Gold insiders are buying or selling shares.

Important note: Gran Colombia Gold 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.