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How Should Investors React To Kinross Gold Corporation's (TSE:K) CEO Pay?

Simply Wall St

In 2012 J. Rollinson was appointed CEO of Kinross Gold Corporation (TSE:K). 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.

View our latest analysis for Kinross Gold

How Does J. Rollinson's Compensation Compare With Similar Sized Companies?

Our data indicates that Kinross Gold Corporation is worth CA$8.6b, and total annual CEO compensation is US$6.2m. (This number is for the twelve months until December 2018). While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$1.0m. 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$4.0m.

Thus we can conclude that J. Rollinson receives more in total compensation than the median of a group of companies in the same market, and of similar size to Kinross Gold Corporation. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

You can see a visual representation of the CEO compensation at Kinross Gold, below.

TSX:K CEO Compensation, August 29th 2019

Is Kinross Gold Corporation Growing?

Over the last three years Kinross Gold Corporation has grown its earnings per share (EPS) by an average of 91% per year (using a line of best fit). It saw its revenue drop -4.4% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Revenue growth is a real positive for growth, but ultimately profits are more important. You might want to check this free visual report on analyst forecasts for future earnings.

Has Kinross Gold Corporation Been A Good Investment?

Kinross Gold Corporation has served shareholders reasonably well, with a total return of 26% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

We examined the amount Kinross Gold Corporation pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

However we must not forget that the EPS growth has been very strong over three years. We also think investors are doing ok, over the same time period. While it may be worth researching further, we don't see a problem with the CEO pay, given the good EPS growth. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Kinross Gold (free visualization of insider trades).

Important note: Kinross 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.