Here's Why We Think Energy Fuels Inc.'s (TSE:EFR) CEO Compensation Looks Fair for the time being

CEO Mark Chalmers has done a decent job of delivering relatively good performance at Energy Fuels Inc. (TSE:EFR) recently. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 26 May 2021. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.

See our latest analysis for Energy Fuels

Comparing Energy Fuels Inc.'s CEO Compensation With the industry

According to our data, Energy Fuels Inc. has a market capitalization of CA$1.0b, and paid its CEO total annual compensation worth US$1.2m over the year to December 2020. That's a notable increase of 48% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$400k.

In comparison with other companies in the industry with market capitalizations ranging from CA$484m to CA$1.9b, the reported median CEO total compensation was US$1.2m. So it looks like Energy Fuels compensates Mark Chalmers in line with the median for the industry. Moreover, Mark Chalmers also holds CA$2.4m worth of Energy Fuels stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2020	2019	Proportion (2020)
Salary	US$400k	US$400k	34%
Other	US$771k	US$389k	66%
Total Compensation	US$1.2m	US$789k	100%

Speaking on an industry level, nearly 56% of total compensation represents salary, while the remainder of 44% is other remuneration. Energy Fuels sets aside a smaller share of compensation for salary, in comparison to the overall industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

Energy Fuels Inc.'s Growth

Energy Fuels Inc.'s earnings per share (EPS) grew 6.7% per year over the last three years. It saw its revenue drop 65% over the last year.

We would argue that the lack of revenue growth in the last year is less than ideal, but the modest improvement in EPS is good. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Energy Fuels Inc. Been A Good Investment?

We think that the total shareholder return of 183%, over three years, would leave most Energy Fuels Inc. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, we still think that any proposed increase in CEO compensation will be examined closely to make sure the compensation is appropriate and linked to performance.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 4 warning signs for Energy Fuels that investors should look into moving forward.

Switching gears from Energy Fuels, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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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