How Much Did Mawson Resources Limited's (TSE:MAW) CEO Pocket Last Year?

Leading Mawson Resources Limited (TSE:MAW) as the CEO, Michael Hudson took the company to a valuation of CA$42.48m. Recognizing whether CEO incentives are aligned with shareholders is a crucial part of investing. This is because, if incentives are aligned, more value is created for shareholders which directly impacts your returns as an investor. I will break down Hudson’s pay and compare this to the company’s performance over the same period, as well as measure it against other Canadian CEOs leading companies of similar size and profitability. View out our latest analysis for Mawson Resources

What has been the trend in MAW's earnings?

Earnings is a powerful indication of MAW's ability to invest shareholders' funds and generate returns. Therefore I will use earnings as a proxy of Hudson's performance in the past year. Recently, MAW delivered negative earnings of -CA$2.19m . But this is an improvement on prior year’s loss of -CA$2.91m, which may signal a turnaround since MAW has been loss-making for the past five years, on average, with an EPS of -CA$0.046. Given earnings are moving the right way, CEO pay should mirror Hudson's valued-adding activities. During the same period, Hudson's total compensation grew by 33.33% to CA$355.00k.

Is MAW overpaying the CEO?

Even though one size does not fit all, since compensation should account for specific factors of the company and market, we can determine a high-level base line to see if MAW deviates substantially from its peers. This exercise can help direct shareholders to ask the right question about Hudson’s incentive alignment. Generally, a Canadian small-cap is worth around $345M, generates earnings of $24M, and remunerates its CEO at roughly $770,000 per year. Normally I'd use market cap and profit as factors determining performance, however, MAW's negative earnings lower the effectiveness of this method. Looking at the range of compensation for small-cap executives, it seems like Hudson is paid aptly compared to those in similar-sized companies. Putting everything together, although MAW is loss-making, it seems like the CEO’s pay is appropriate.

Next Steps:

Hopefully this article has given you insight on how shareholders should think about MAW's governance policies such as CEO pay. As an investor, you have the right to understand how the board thinks about management incentives, and also the right to vote for and against substantial CEO pay changes. Governance is a big factor in investing, and I encourage you to dig deeper into those that represent your voice on the board. If you have not done so already, I urge you to complete your research by taking a look at the following:

1. Governance: To find out more about MAW's governance, look through our infographic report of the company's board and management.
2. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of MAW? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.