Why Aura Minerals' (TSE:ORA) CEO Pay Matters
Rodrigo Barbosa became the CEO of Aura Minerals Inc. (TSE:ORA) in 2017, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
See our latest analysis for Aura Minerals
How Does Total Compensation For Rodrigo Barbosa Compare With Other Companies In The Industry?
At the time of writing, our data shows that Aura Minerals Inc. has a market capitalization of CA$1.0b, and reported total annual CEO compensation of US$978k for the year to December 2019. That's a notable increase of 21% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$350k.
On examining similar-sized companies in the industry with market capitalizations between CA$512m and CA$2.0b, we discovered that the median CEO total compensation of that group was US$978k. So it looks like Aura Minerals compensates Rodrigo Barbosa in line with the median for the industry. Moreover, Rodrigo Barbosa also holds CA$442k worth of Aura Minerals stock directly under their own name.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$350k | US$350k | 36% |
Other | US$628k | US$456k | 64% |
Total Compensation | US$978k | US$806k | 100% |
Talking in terms of the industry, salary represented approximately 89% of total compensation out of all the companies we analyzed, while other remuneration made up 11% of the pie. Aura Minerals pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Aura Minerals Inc.'s Growth
Over the past three years, Aura Minerals Inc. has seen its earnings per share (EPS) grow by 8.9% per year. It achieved revenue growth of 41% over the last year.
It's hard to interpret the strong revenue growth as anything other than a positive. With that in mind, the modestly improving EPS seems positive. We'd stop short of saying the business performance is amazing, but there are enough positives to justify further research, or even adding the stock to your watch-list. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Aura Minerals Inc. Been A Good Investment?
We think that the total shareholder return of 1,003%, over three years, would leave most Aura Minerals Inc. shareholders smiling. 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.
In Summary...
As previously discussed, Rodrigo is compensated close to the median for companies of its size, and which belong to the same industry. But the company has been found wanting in terms of EPS growth over the past three years. Meanwhile, shareholder returns have remained positive over the same time frame. We would like to see EPS growth from the business, although we wouldn't say the CEO compensation is high.
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. We've identified 1 warning sign for Aura Minerals that investors should be aware of in a dynamic business environment.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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