The CEO of GobiMin Inc. (CVE:GMN) is Felipe Tan, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for GobiMin.
How Does Total Compensation For Felipe Tan Compare With Other Companies In The Industry?
Our data indicates that GobiMin Inc. has a market capitalization of CA$14m, and total annual CEO compensation was reported as CA$231k for the year to December 2019. Notably, that's a decrease of 15% over the year before. In particular, the salary of US$192.5k, makes up a huge portion of the total compensation being paid to the CEO.
For comparison, other companies in the industry with market capitalizations below CA$268m, reported a median total CEO compensation of CA$255k. From this we gather that Felipe Tan is paid around the median for CEOs in the industry. Moreover, Felipe Tan also holds CA$1.1m worth of GobiMin stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, roughly 43% of total compensation represents salary and 57% is other remuneration. It's interesting to note that GobiMin pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at GobiMin Inc.'s Growth Numbers
Over the last three years, GobiMin Inc. has shrunk its earnings per share by 13% per year. Its revenue is down 46% over the previous year.
Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has GobiMin Inc. Been A Good Investment?
With a three year total loss of 39% for the shareholders, GobiMin Inc. would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
As previously discussed, Felipe is compensated close to the median for companies of its size, and which belong to the same industry. In the meantime, the company has reported declining EPS growth and shareholder returns over the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 3 warning signs for GobiMin (1 is a bit concerning!) that you should be aware of before investing here.
Important note: GobiMin is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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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