Yahoo Finance What Can We Conclude About Denison Mines' (TSE:DML) CEO Pay?
David Cates has been the CEO of Denison Mines Corp. (TSE:DML) since 2015, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Denison Mines pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
See our latest analysis for Denison Mines
Comparing Denison Mines Corp.'s CEO Compensation With the industry
According to our data, Denison Mines Corp. has a market capitalization of CA$303m, and paid its CEO total annual compensation worth CA$960k over the year to December 2019. We note that's a decrease of 22% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CA$313k.
On examining similar-sized companies in the industry with market capitalizations between CA$131m and CA$526m, we discovered that the median CEO total compensation of that group was CA$1.3m. From this we gather that David Cates is paid around the median for CEOs in the industry. Furthermore, David Cates directly owns CA$398k worth of shares in the company.
Component | 2019 | 2018 | Proportion (2019) |
Salary | CA$313k | CA$306k | 33% |
Other | CA$647k | CA$931k | 67% |
Total Compensation | CA$960k | CA$1.2m | 100% |
On an industry level, around 43% of total compensation represents salary and 57% is other remuneration. Denison Mines 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.
Denison Mines Corp.'s Growth
Over the last three years, Denison Mines Corp. has shrunk its earnings per share by 1.5% per year. It saw its revenue drop 6.0% over the last year.
Its a bit disappointing to see that the company has failed to grow its EPS. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Denison Mines Corp. Been A Good Investment?
Given the total shareholder loss of 13% over three years, many shareholders in Denison Mines Corp. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.
To Conclude...
As we noted earlier, Denison Mines pays its CEO in line with similar-sized companies belonging to the same industry. On the other hand, EPS growth and total shareholder return have been negative for the last three years. It's tough to call out the compensation as inappropriate, but shareholders might not favor a raise before company performance improves.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 4 warning signs for Denison Mines (of which 1 is significant!) that you should know about in order to have a holistic understanding of the stock.
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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