Yahoo Finance How Is Gran Colombia Gold's (TSE:GCM) CEO Compensated?
This article will reflect on the compensation paid to Lombardo Arenas who has served as CEO of Gran Colombia Gold Corp. (TSE:GCM) since 2014. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
View our latest analysis for Gran Colombia Gold
How Does Total Compensation For Lombardo Arenas Compare With Other Companies In The Industry?
At the time of writing, our data shows that Gran Colombia Gold Corp. has a market capitalization of CA$400m, and reported total annual CEO compensation of US$747k for the year to December 2019. That's a notable increase of 26% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$338k.
On examining similar-sized companies in the industry with market capitalizations between CA$266m and CA$1.1b, we discovered that the median CEO total compensation of that group was US$631k. This suggests that Gran Colombia Gold remunerates its CEO largely in line with the industry average.
Component | 2019 | 2018 | Proportion (2019) |
Salary | US$338k | US$295k | 45% |
Other | US$410k | US$299k | 55% |
Total Compensation | US$747k | US$594k | 100% |
On an industry level, around 83% of total compensation represents salary and 17% is other remuneration. In Gran Colombia Gold's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Gran Colombia Gold Corp.'s Growth Numbers
Over the last three years, Gran Colombia Gold Corp. has shrunk its earnings per share by 103% per year. In the last year, its revenue is up 21%.
Investors would be a bit wary of companies that have lower EPS But on the other hand, revenue growth is strong, suggesting a brighter future. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 Gran Colombia Gold Corp. Been A Good Investment?
Boasting a total shareholder return of 225% over three years, Gran Colombia Gold Corp. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
To Conclude...
As we noted earlier, Gran Colombia Gold pays its CEO in line with similar-sized companies belonging to the same industry. Shareholder returns for the company have been strong for the last three years. At the same time, revenues are also moving northwards at a healthy pace. On a worrying note, its important to acknowledge that EPS growth has been negative recently. However, considering overall positive performance, we think Lombardo, shareholders might not be too worried about the CEO's compensation.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Gran Colombia Gold that investors should think about before committing capital to this stock.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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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