Should You Worry About Amerigo Resources Ltd.’s (TSE:ARG) CEO Pay?
Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
Rob Henderson became the CEO of Amerigo Resources Ltd. (TSE:ARG) in 2015. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for Amerigo Resources
How Does Rob Henderson’s Compensation Compare With Similar Sized Companies?
Our data indicates that Amerigo Resources Ltd. is worth CA$172m, and total annual CEO compensation is US$864k. (This is based on the year to 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$300k. We looked at a group of companies with market capitalizations under CA$265m, and the median CEO compensation was CA$156k.
As you can see, Rob Henderson is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Amerigo Resources Ltd. is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
The graphic below shows how CEO compensation at Amerigo Resources has changed from year to year.
Is Amerigo Resources Ltd. Growing?
Over the last three years Amerigo Resources Ltd. has grown its earnings per share (EPS) by an average of 103% per year (using a line of best fit). It achieved revenue growth of 7.7% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It’s also good to see modest revenue growth, suggesting the underlying business is healthy. It could be important to check this free visual depiction of what analysts expect for the future.
Has Amerigo Resources Ltd. Been A Good Investment?
I think that the total shareholder return of 586%, over three years, would leave most Amerigo Resources Ltd. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
In Summary…
We examined the amount Amerigo Resources Ltd. pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. Even better, returns to shareholders have been plentiful, over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Amerigo Resources.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
