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How Should Investors React To Caledonia Mining Corporation Plc's (TSE:CAL) CEO Pay?

Simply Wall St

Steve Curtis has been the CEO of Caledonia Mining Corporation Plc (TSE:CAL) 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 we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for Caledonia Mining

How Does Steve Curtis's Compensation Compare With Similar Sized Companies?

Our data indicates that Caledonia Mining Corporation Plc is worth CA$116m, and total annual CEO compensation was reported as US$576k for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$450k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$156k.

Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Caledonia Mining. On a sector level, around 92% of total compensation represents salary and 7.7% is other remuneration. So it seems like there isn't a significant difference between Caledonia Mining and the broader market, in terms of salary allocation in the overall compensation package.

As you can see, Steve Curtis is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Caledonia Mining Corporation Plc 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 Caledonia Mining, below.

TSX:CAL CEO Compensation, March 22nd 2020

Is Caledonia Mining Corporation Plc Growing?

Over the last three years Caledonia Mining Corporation Plc has grown its earnings per share (EPS) by an average of 63% per year (using a line of best fit). Its revenue is up 11% over last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Shareholders might be interested in this free visualization of analyst forecasts.

Has Caledonia Mining Corporation Plc Been A Good Investment?

Caledonia Mining Corporation Plc has generated a total shareholder return of 20% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

We compared total CEO remuneration at Caledonia Mining Corporation Plc with the amount paid at companies with a similar market capitalization. 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. Looking at the same time period, we think that the shareholder returns are respectable. You might wish to research management further, but on this analysis, considering the EPS growth, we wouldn't call the CEO pay problematic. Taking a breather from CEO compensation, we've spotted 6 warning signs for Caledonia Mining (of which 2 are concerning!) you should know about in order to have a holistic understanding of the stock.

Important note: Caledonia Mining 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.

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.