We Think The Compensation For Altius Minerals Corporation's (TSE:ALS) CEO Looks About Right

Altius Minerals Corporation (TSE:ALS) has exhibited strong share price growth in the past few years. However, its earnings growth has not kept up, suggesting that there may be something amiss. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 12 May 2021. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. In our analysis below, we show why shareholders may consider holding off a raise for the CEO's compensation until company performance improves.

See our latest analysis for Altius Minerals

Comparing Altius Minerals Corporation's CEO Compensation With the industry

According to our data, Altius Minerals Corporation has a market capitalization of CA$749m, and paid its CEO total annual compensation worth CA$1.3m over the year to December 2020. Notably, that's a decrease of 8.3% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at CA$450k.

On examining similar-sized companies in the industry with market capitalizations between CA$488m and CA$2.0b, we discovered that the median CEO total compensation of that group was CA$1.3m. So it looks like Altius Minerals compensates Brian Dalton in line with the median for the industry. Furthermore, Brian Dalton directly owns CA$25m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2020	2019	Proportion (2020)
Salary	CA$450k	CA$450k	34%
Other	CA$855k	CA$974k	66%
Total Compensation	CA$1.3m	CA$1.4m	100%

On an industry level, around 94% of total compensation represents salary and 6% is other remuneration. Altius Minerals sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

Altius Minerals Corporation's Growth

Over the last three years, Altius Minerals Corporation has shrunk its earnings per share by 96% per year. Its revenue is down 1.8% over the previous year.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Altius Minerals Corporation Been A Good Investment?

Most shareholders would probably be pleased with Altius Minerals Corporation for providing a total return of 34% over three years. 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.

In Summary...

While the return to shareholders does look promising, it's hard to ignore the lack of earnings growth and this makes us question whether these strong returns will continue. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Altius Minerals (free visualization of insider trades).

Important note: Altius Minerals 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.

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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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