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Is Scorpio Gold Corporation's (CVE:SGN) CEO Salary Justified?

Simply Wall St

In 2016 Brian Lock was appointed CEO of Scorpio Gold Corporation (CVE:SGN). 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 method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Scorpio Gold

How Does Brian Lock's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Scorpio Gold Corporation has a market cap of CA$6.9m, and reported total annual CEO compensation of US$265k for the year to December 2018. Notably, the salary of US$265k is the vast majority of the CEO compensation. We examined a group of similar sized companies, with market capitalizations of below CA$261m. The median CEO total compensation in that group is CA$216k.

So Brian Lock 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 Scorpio Gold has changed over time.

TSXV:SGN CEO Compensation, January 16th 2020

Is Scorpio Gold Corporation Growing?

Scorpio Gold Corporation has increased its earnings per share (EPS) by an average of 60% a year, over the last three years (using a line of best fit). It saw its revenue drop 54% over the last year.

This demonstrates that the company has been improving recently. A good result. While it would be good to see revenue growth, profits matter more in the end. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Scorpio Gold Corporation Been A Good Investment?

Since shareholders would have lost about 59% over three years, some Scorpio Gold Corporation shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Brian Lock is paid around what is normal the leaders of comparable size companies.

We think that the EPS growth is very pleasing, but we find the returns over the last three years to be lacking. Considering the the positives we don't think the CEO pays is too high, but it's certainly hard to argue it is too low. So you may want to check if insiders are buying Scorpio Gold shares with their own money (free access).

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

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.