Scott Perry has been the CEO of Centerra Gold Inc. (TSE:CG) since 2015, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
How Does Total Compensation For Scott Perry Compare With Other Companies In The Industry?
According to our data, Centerra Gold Inc. has a market capitalization of CA$4.9b, and paid its CEO total annual compensation worth CA$3.6m over the year to December 2019. That's just a smallish increase of 7.3% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CA$601k.
On examining similar-sized companies in the industry with market capitalizations between CA$2.6b and CA$8.4b, we discovered that the median CEO total compensation of that group was CA$4.0m. From this we gather that Scott Perry is paid around the median for CEOs in the industry. Furthermore, Scott Perry directly owns CA$1.9m worth of shares in the company, implying that they are deeply invested in the company's success.
Speaking on an industry level, nearly 84% of total compensation represents salary, while the remainder of 16% is other remuneration. Centerra Gold pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at Centerra Gold Inc.'s Growth Numbers
Over the last three years, Centerra Gold Inc. has shrunk its earnings per share by 79% per year. In the last year, its revenue is up 12%.
Overall this is not a very positive result for shareholders. And while it's good to see some good revenue growth recently, the growth isn't really fast enough for us to put aside my concerns around EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Centerra Gold Inc. Been A Good Investment?
Boasting a total shareholder return of 140% over three years, Centerra Gold Inc. has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
As previously discussed, Scott is compensated close to the median for companies of its size, and which belong to the same industry. This doesn't look good when you see that EPS growth over the last three years has been negative. On the flip side, shareholder returns have been strong over the same time, which is certainly a positive sign. We're not saying CEO compensation is too generous, but shrinking EPS is undoubtedly an issue that will have to be addressed.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 1 warning sign for Centerra Gold that investors should be aware of in a dynamic business environment.
Switching gears from Centerra 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email firstname.lastname@example.org.