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How Should Investors React To Starcore International Mines Ltd.’s (TSE:SAM) CEO Pay?

Robert Eadie became the CEO of Starcore International Mines Ltd. (TSE:SAM) in 2010. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. 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. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for Starcore International Mines

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How Does Robert Eadie’s Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Starcore International Mines Ltd. has a market cap of CA$5.0m, and is paying total annual CEO compensation of CA$538k. (This number is for the twelve months until 2018). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at CA$360k. We took a group of companies with market capitalizations below CA$267m, and calculated the median CEO compensation to be CA$156k.

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As you can see, Robert Eadie is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Starcore International Mines Ltd. is paying too much. 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 Starcore International Mines has changed from year to year.

TSX:SAM CEO Compensation January 23rd 19
TSX:SAM CEO Compensation January 23rd 19

Is Starcore International Mines Ltd. Growing?

Over the last three years Starcore International Mines Ltd. has shrunk its earnings per share by an average of 87% per year. Its revenue is up 19% over last year.

Few shareholders would be pleased to read that earnings per share are lower over three years. While the revenue growth is good to see, it is outweighed by the fact that earnings per share are down, over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO.

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 Starcore International Mines Ltd. Been A Good Investment?

Given the total loss of 64% over three years, many shareholders in Starcore International Mines Ltd. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

We compared the total CEO remuneration paid by Starcore International Mines Ltd., and compared it to remuneration at a group of similar sized companies. 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.

Over the same period, investors would have come away with nothing in the way of share price gains. In our opinion the CEO might be paid too generously! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Starcore International Mines (free visualization of insider trades).

Or you might rather take a peek at this analytical visualization of historic cash flow, earnings and revenue.

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.