Tim Gitzel became the CEO of Cameco Corporation (TSE:CCO) in 2011. First, this article will compare CEO compensation with compensation at similar sized companies. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.
How Does Tim Gitzel’s Compensation Compare With Similar Sized Companies?
According to our data, Cameco Corporation has a market capitalization of CA$5.6b, and pays its CEO total annual compensation worth CA$6m. That’s a modest increase of 5.6% on the prior year year. We looked at a group of companies with market capitalizations from CA$2.6b to CA$8.4b, and the median CEO compensation was CA$4m.
Thus we can conclude that Tim Gitzel receives more in total compensation than the median of a group of companies in the same market, and of similar size to Cameco Corporation. However, this doesn’t necessarily mean the pay is too high. 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 Cameco has changed from year to year.
Is Cameco Corporation Growing?
Cameco Corporation has reduced its earnings per share by an average of 94% a year, over the last three years. In the last year, its revenue is down -15%.
Few shareholders would be pleased to read that earnings per share are lower over three years. 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. So this free visualization of the analyst consensus on future earnings could help you make the right decision about whether to buy, sell, or hold.
Has Cameco Corporation Been A Good Investment?
Given the total loss of 16% over three years, many shareholders in Cameco Corporation are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
We examined the amount Cameco Corporation pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.We think many shareholders would be underwhelmed with the business growth over the last three years.
Just as bad, share price gains for investors have failed to materialize, over the same period. This analysis suggests to us that the CEO is paid too generously! High CEO remuneration is not great, but it certainly doesn’t mean a stock will perform poorly. Still, shareholders might want to check if insiders have been selling.
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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 email@example.com.