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How Should Investors React To First Quantum Minerals Ltd.'s (TSE:FM) CEO Pay?

Simply Wall St

Philip Kelvin Pascall has been the CEO of First Quantum Minerals Ltd. (TSE:FM) since 1996. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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.

Check out our latest analysis for First Quantum Minerals

How Does Philip Kelvin Pascall's Compensation Compare With Similar Sized Companies?

According to our data, First Quantum Minerals Ltd. has a market capitalization of CA$9.6b, and paid its CEO total annual compensation worth US$4.6m over the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at US$1.2m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We examined companies with market caps from US$4.0b to US$12b, and discovered that the median CEO total compensation of that group was US$4.1m.

So Philip Kelvin Pascall is paid around the average of the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance.

The graphic below shows how CEO compensation at First Quantum Minerals has changed from year to year.

TSX:FM CEO Compensation, December 14th 2019

Is First Quantum Minerals Ltd. Growing?

Over the last three years First Quantum Minerals Ltd. has grown its earnings per share (EPS) by an average of 43% per year (using a line of best fit). In the last year, its revenue is up 1.1%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. Shareholders might be interested in this free visualization of analyst forecasts.

Has First Quantum Minerals Ltd. Been A Good Investment?

Since shareholders would have lost about 4.8% over three years, some First Quantum Minerals Ltd. shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Remuneration for Philip Kelvin Pascall is close enough to the median pay for a CEO of a similar sized company .

We think that the EPS growth is very pleasing, but we find the returns over the last three years to be lacking. We'd be surprised if shareholders want to see a pay rise for the CEO, but we'd stop short of calling their pay too generous. Whatever your view on compensation, you might want to check if insiders are buying or selling First Quantum Minerals shares (free trial).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.