Performance at Energy Fuels Inc. (TSE:EFR) has been reasonably good and CEO Mark Chalmers has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 26 May 2021. Here is our take on why we think the CEO compensation looks appropriate.
How Does Total Compensation For Mark Chalmers Compare With Other Companies In The Industry?
Our data indicates that Energy Fuels Inc. has a market capitalization of CA$1.0b, and total annual CEO compensation was reported as US$1.2m for the year to December 2020. That's a notable increase of 48% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$400k.
On comparing similar companies from the same industry with market caps ranging from CA$484m to CA$1.9b, we found that the median CEO total compensation was US$1.2m. So it looks like Energy Fuels compensates Mark Chalmers in line with the median for the industry. Moreover, Mark Chalmers also holds CA$2.4m worth of Energy Fuels stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, around 56% of total compensation represents salary and 44% is other remuneration. It's interesting to note that Energy Fuels allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Energy Fuels Inc.'s Growth
Energy Fuels Inc. has seen its earnings per share (EPS) increase by 6.7% a year over the past three years. Its revenue is down 65% over the previous year.
We generally like to see a little revenue growth, but the modest EPS growth gives us some relief. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Energy Fuels Inc. Been A Good Investment?
Most shareholders would probably be pleased with Energy Fuels Inc. for providing a total return of 183% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. Despite the pleasing results, we still think that any proposed increases to CEO compensation will be examined based on a case by case basis and linked to performance outcomes.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 4 warning signs for Energy Fuels that you should be aware of before investing.
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.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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