David Cates became the CEO of Denison Mines Corp. (TSE:DML) in 2015. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does David Cates’s Compensation Compare With Similar Sized Companies?
According to our data, Denison Mines Corp. has a market capitalization of CA$418m, and pays its CEO total annual compensation worth CA$1.2m. (This is based on the year to December 2018). Notably, that’s an increase of 48% over the year before. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at CA$306k. We examined companies with market caps from CA$268m to CA$1.1b, and discovered that the median CEO total compensation of that group was CA$1.3m.
So David Cates receives a similar amount to the median CEO pay, amongst the companies we looked at. This doesn’t tell us a whole lot on its own, but looking at the performance of the actual business will give us useful context.
The graphic below shows how CEO compensation at Denison Mines has changed from year to year.
Is Denison Mines Corp. Growing?
Earnings per share at Denison Mines Corp. are much the same as they were three years ago, albeit with a positive trend. Its revenue is down -3.2% over last year.
I would argue that the lack of revenue growth in the last year is less than ideal, but I’m happy with the modest EPS growth. It’s hard to reach a conclusion about business performance right now. This may be one to watch. It could be important to check this free visual depiction of what analysts expect for the future.
Has Denison Mines Corp. Been A Good Investment?
With a three year total loss of 6.6%, Denison Mines Corp. would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
David Cates is paid around what is normal the leaders of comparable size companies.
We would like to see somewhat stronger per share growth. And shareholder returns have been disappointing over the last three years. Shareholders might not feel great about the fact that CEO pay increased on last year. So it would take a bold person to suggest the pay is too modest. So you may want to check if insiders are buying Denison Mines shares with their own money (free access).
Important note: Denison Mines may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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