We Think Some Shareholders May Hesitate To Increase TRX Gold Corporation's (TSE:TRX) CEO Compensation
Key Insights
TRX Gold's Annual General Meeting to take place on 29th of February
CEO Stephen Mullowney's total compensation includes salary of US$370.0k
The total compensation is 851% higher than the average for the industry
TRX Gold's EPS grew by 78% over the past three years while total shareholder loss over the past three years was 50%
The underwhelming share price performance of TRX Gold Corporation (TSE:TRX) in the past three years would have disappointed many shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 29th of February. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.
See our latest analysis for TRX Gold
How Does Total Compensation For Stephen Mullowney Compare With Other Companies In The Industry?
Our data indicates that TRX Gold Corporation has a market capitalization of CA$128m, and total annual CEO compensation was reported as US$1.4m for the year to August 2023. That's a modest increase of 6.5% on the prior year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$370k.
On comparing similar-sized companies in the Canadian Metals and Mining industry with market capitalizations below CA$270m, we found that the median total CEO compensation was US$142k. This suggests that Stephen Mullowney is paid more than the median for the industry. What's more, Stephen Mullowney holds CA$406k worth of shares in the company in their own name.
Component | 2023 | 2022 | Proportion (2023) |
Salary | US$370k | US$381k | 27% |
Other | US$981k | US$888k | 73% |
Total Compensation | US$1.4m | US$1.3m | 100% |
On an industry level, around 95% of total compensation represents salary and 5% is other remuneration. TRX Gold 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.
TRX Gold Corporation's Growth
TRX Gold Corporation's earnings per share (EPS) grew 78% per year over the last three years. Its revenue is up 53% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 TRX Gold Corporation Been A Good Investment?
Few TRX Gold Corporation shareholders would feel satisfied with the return of -50% over three years. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would be keen to know what's holding the stock back when earnings have grown. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 2 warning signs for TRX Gold you should be aware of, and 1 of them makes us a bit uncomfortable.
Switching gears from TRX Gold, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
