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We Think Hecla Mining Company's (NYSE:HL) CEO Compensation Looks Fair

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The performance at Hecla Mining Company (NYSE:HL) has been quite strong recently and CEO Phillips Baker has played a role in it. Coming up to the next AGM on 19 May 2021, shareholders would be keeping this in mind. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

See our latest analysis for Hecla Mining

How Does Total Compensation For Phillips Baker Compare With Other Companies In The Industry?

Our data indicates that Hecla Mining Company has a market capitalization of US$3.9b, and total annual CEO compensation was reported as US$5.2m for the year to December 2020. That's mostly flat as compared to the prior year's compensation. While we always look at total compensation first, our analysis shows that the salary component is less, at US$635k.

In comparison with other companies in the industry with market capitalizations ranging from US$2.0b to US$6.4b, the reported median CEO total compensation was US$5.5m. This suggests that Hecla Mining remunerates its CEO largely in line with the industry average. What's more, Phillips Baker holds US$21m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component

2020

2019

Proportion (2020)

Salary

US$635k

US$635k

12%

Other

US$4.6m

US$4.4m

88%

Total Compensation

US$5.2m

US$5.1m

100%

On an industry level, roughly 36% of total compensation represents salary and 64% is other remuneration. Hecla Mining pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
ceo-compensation

A Look at Hecla Mining Company's Growth Numbers

Hecla Mining Company has seen its earnings per share (EPS) increase by 15% a year over the past three years. In the last year, its revenue is up 16%.

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

Has Hecla Mining Company Been A Good Investment?

Most shareholders would probably be pleased with Hecla Mining Company for providing a total return of 87% 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.

To Conclude...

Seeing that company performance has been quite good recently, some shareholders may feel that CEO compensation may not be the biggest focus in the upcoming AGM. However, despite the strong growth in earnings and share price growth, the focus for shareholders would be how the company plans to steer the company towards sustainable profitability in the near future.

CEO compensation can have a massive impact on performance, but it's just one element. We've identified 2 warning signs for Hecla Mining that investors should be aware of in a dynamic business environment.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.