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Peter Leger became the CEO of Teras Resources Inc. (CVE:TRA) in 2006. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Peter Leger's Compensation Compare With Similar Sized Companies?
Our data indicates that Teras Resources Inc. is worth CA$8.7m, and total annual CEO compensation is CA$250k. (This figure is for the year to May 2018). Notably, the salary of CA$250k is the vast majority of the CEO compensation. We looked at a group of companies with market capitalizations under CA$261m, and the median CEO total compensation was CA$120k.
It would therefore appear that Teras Resources Inc. pays Peter Leger more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at Teras Resources has changed from year to year.
Is Teras Resources Inc. Growing?
On average over the last three years, Teras Resources Inc. has shrunk earnings per share by 22% each year (measured with a line of best fit). It saw its revenue drop -58% over the last year.
Unfortunately, earnings per share have trended lower over the last three years. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Teras Resources Inc. Been A Good Investment?
Given the total loss of 72% over three years, many shareholders in Teras Resources Inc. are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We compared total CEO remuneration at Teras Resources Inc. with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
Earnings per share have not grown in three years, and the revenue growth fails to impress us.
Just as bad, share price gains for investors have failed to materialize, over the same period. This analysis suggests to us that the CEO is paid too generously! If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Teras Resources.
Important note: Teras Resources may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.