U.S. Markets open in 9 hrs 11 mins

Is Inca One Gold Corp. (CVE:IO) Overpaying Its CEO?

Simply Wall St

In 2010 Ed Kelly was appointed CEO of Inca One Gold Corp. (CVE:IO). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

Check out our latest analysis for Inca One Gold

How Does Ed Kelly's Compensation Compare With Similar Sized Companies?

According to our data, Inca One Gold Corp. has a market capitalization of CA$7.9m, and paid its CEO total annual compensation worth US$413k over the year to April 2019. We think total compensation is more important but we note that the CEO salary is lower, at US$200k. We examined a group of similar sized companies, with market capitalizations of below CA$266m. The median CEO total compensation in that group is CA$180k.

It would therefore appear that Inca One Gold Corp. pays Ed Kelly more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

The graphic below shows how CEO compensation at Inca One Gold has changed from year to year.

TSXV:IO CEO Compensation, December 4th 2019

Is Inca One Gold Corp. Growing?

On average over the last three years, Inca One Gold Corp. has grown earnings per share (EPS) by 123% each year (using a line of best fit). It achieved revenue growth of 118% over the last year.

This demonstrates that the company has been improving recently. A good result. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 Inca One Gold Corp. Been A Good Investment?

Given the total loss of 91% over three years, many shareholders in Inca One Gold Corp. are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

We examined the amount Inca One Gold Corp. pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. Having said that, shareholders may be disappointed with the weak returns over the last three years. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. Shareholders may want to check for free if Inca One Gold insiders are buying or selling shares.

If you want to buy a stock that is better than Inca One Gold, this free list of high return, low debt companies is a great place to look.

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.

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. Thank you for reading.