Is Argonaut Gold Inc’s (TSE:AR) CEO Being Overpaid?

Pete Dougherty has been the CEO of Argonaut Gold Inc (TSE:AR) since 2009. 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 – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for Argonaut Gold

How Does Pete Dougherty’s Compensation Compare With Similar Sized Companies?

According to our data, Argonaut Gold Inc has a market capitalization of CA$288m, and pays its CEO total annual compensation worth US$1m. We note that’s an increase of 14% above last year. We looked at a group of companies with market capitalizations from US$100m to US$400m, and the median CEO compensation was US$649k.

As you can see, Pete Dougherty is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Argonaut Gold Inc is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see a visual representation of the CEO compensation at Argonaut Gold, below.

TSX:AR CEO Compensation October 19th 18
TSX:AR CEO Compensation October 19th 18

Is Argonaut Gold Inc Growing?

Argonaut Gold Inc has increased its earnings per share (EPS) by an average of 80% a year, over the last three years In the last year, its revenue is up 8.9%.

This shows that the company has improved itself over the last few years. Good news for shareholders. It’s good to see a bit of revenue growth, as this suggests the business is able to grow sustainably.

You might want to check this free visual report on analyst forecasts for future earnings.

Has Argonaut Gold Inc Been A Good Investment?

Argonaut Gold Inc has not done too badly by shareholders, with a total return of 0.6%, over three years. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.

In Summary…

We compared total CEO remuneration at Argonaut Gold Inc with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.

However we must not forget that the EPS growth has been very strong over three years. We also note that, over the same time frame, shareholder returns haven’t been bad. While it may be worth researching further, we don’t see a problem with the CEO pay, given the good EPS growth. So you may want to check if insiders are buying Argonaut Gold Inc shares with their own money (free access).

Or you might rather take a peek at this analytical visualization of historic cash flow, earnings and revenue.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

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 editorial-team@simplywallst.com.