John McCluskey has been the CEO of Alamos Gold Inc. (TSE:AGI) since 2015, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
How Does Total Compensation For John McCluskey Compare With Other Companies In The Industry?
At the time of writing, our data shows that Alamos Gold Inc. has a market capitalization of CA$4.8b, and reported total annual CEO compensation of US$3.0m for the year to December 2019. That's a notable increase of 15% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$641k.
In comparison with other companies in the industry with market capitalizations ranging from CA$2.7b to CA$8.5b, the reported median CEO total compensation was US$2.7m. This suggests that Alamos Gold remunerates its CEO largely in line with the industry average. What's more, John McCluskey holds CA$12m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Speaking on an industry level, nearly 83% of total compensation represents salary, while the remainder of 17% is other remuneration. Alamos Gold sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Alamos Gold Inc.'s Growth
Alamos Gold Inc. has seen its earnings per share (EPS) increase by 39% a year over the past three years. In the last year, its revenue is up 4.4%.
Shareholders would be glad to know that the company has improved itself over the last few years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. 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 Alamos Gold Inc. Been A Good Investment?
Boasting a total shareholder return of 44% over three years, Alamos Gold Inc. has done well by shareholders. 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.
As we noted earlier, Alamos Gold pays its CEO in line with similar-sized companies belonging to the same industry. The company is growing EPS and total shareholder returns have been pleasing. Although the pay is close to the industry median, overall performance is excellent, so we don't think the CEO is paid too generously. Stockholders might even be okay with a bump in pay, seeing as how investor returns have been so strong.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 2 warning signs for Alamos Gold that investors should look into moving forward.
Important note: Alamos Gold is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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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