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Is Major Drilling Group International Inc.'s (TSE:MDI) CEO Being Overpaid?

Simply Wall St

Denis Larocque has been the CEO of Major Drilling Group International Inc. (TSE:MDI) since 2015. 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. 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.

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View our latest analysis for Major Drilling Group International

How Does Denis Larocque's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Major Drilling Group International Inc. has a market cap of CA$331m, and is paying total annual CEO compensation of CA$889k. (This number is for the twelve months until April 2018). While we always look at total compensation first, we note that the salary component is less, at CA$371k. When we examined a selection of companies with market caps ranging from CA$134m to CA$537m, we found the median CEO total compensation was CA$858k.

So Denis Larocque 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.

You can see, below, how CEO compensation at Major Drilling Group International has changed over time.

TSX:MDI CEO Compensation, May 22nd 2019

Is Major Drilling Group International Inc. Growing?

Over the last three years Major Drilling Group International Inc. has grown its earnings per share (EPS) by an average of 36% per year (using a line of best fit). It achieved revenue growth of 16% over the last year.

This demonstrates that the company has been improving recently. A good result. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. You might want to check this free visual report on analyst forecasts for future earnings.

Has Major Drilling Group International Inc. Been A Good Investment?

Given the total loss of 37% over three years, many shareholders in Major Drilling Group International Inc. are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Denis Larocque is paid around the same as most CEOs of similar size companies.

We'd say the company can boast of its EPS growth, but we cannot say the same about the lacklustre shareholder returns (over the last three years). Considering the improvement in earnings per share, one could argue that the CEO pay is appropriate, albeit not too low. Whatever your view on compensation, you might want to check if insiders are buying or selling Major Drilling Group International shares (free trial).

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity 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.