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Is Majestic Gold Corp. (CVE:MJS) Overpaying Its CEO?

Simply Wall St

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Steve Kenwood has been the CEO of Majestic Gold Corp. (CVE:MJS) since 2014. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Majestic Gold

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

Our data indicates that Majestic Gold Corp. is worth CA$58m, and total annual CEO compensation is US$150k. (This is based on the year to September 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$120k. We examined a group of similar sized companies, with market capitalizations of below CA$267m. The median CEO total compensation in that group is CA$151k.

So Steve Kenwood receives a similar amount to the median CEO pay, amongst the companies we looked at. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.

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

TSXV:MJS CEO Compensation, June 20th 2019

Is Majestic Gold Corp. Growing?

Majestic Gold Corp. has increased its earnings per share (EPS) by an average of 106% a year, over the last three years (using a line of best fit). Its revenue is up 6.9% over last year.

This demonstrates that the company has been improving recently. A good result. It's nice to see a little revenue growth, as this is consistent with healthy business conditions. Although we don't have analyst forecasts, you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Majestic Gold Corp. Been A Good Investment?

Given the total loss of 15% over three years, many shareholders in Majestic Gold Corp. are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

Remuneration for Steve Kenwood 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 it's disappointing to see negative shareholder returns over three years. 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. Shareholders may want to check for free if Majestic Gold insiders are buying or selling shares.

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

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.