It's Unlikely That Dynacor Gold Mines Inc.'s (TSE:DNG) CEO Will See A Huge Pay Rise This Year

Dynacor Gold Mines Inc. (TSE:DNG) 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. Some of these issues will occupy shareholders' minds as the AGM rolls around on 17 June 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.

Check out our latest analysis for Dynacor Gold Mines

Comparing Dynacor Gold Mines Inc.'s CEO Compensation With the industry

At the time of writing, our data shows that Dynacor Gold Mines Inc. has a market capitalization of CA$96m, and reported total annual CEO compensation of US$311k for the year to December 2020. We note that's a decrease of 11% compared to last year. We note that the salary portion, which stands at US$268.8k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below CA$242m, reported a median total CEO compensation of US$124k. Accordingly, our analysis reveals that Dynacor Gold Mines Inc. pays Jean Martineau north of the industry median. Furthermore, Jean Martineau directly owns CA$2.3m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2020	2019	Proportion (2020)
Salary	US$269k	US$264k	87%
Other	US$42k	US$86k	13%
Total Compensation	US$311k	US$350k	100%

Speaking on an industry level, nearly 93% of total compensation represents salary, while the remainder of 7% is other remuneration. Dynacor Gold Mines is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Dynacor Gold Mines Inc.'s Growth Numbers

Over the last three years, Dynacor Gold Mines Inc. has shrunk its earnings per share by 3.3% per year. Its revenue is up 1.0% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Dynacor Gold Mines Inc. Been A Good Investment?

Most shareholders would probably be pleased with Dynacor Gold Mines Inc. for providing a total return of 43% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean returns may be hard to keep up. 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.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 4 warning signs for Dynacor Gold Mines that you should be aware of before investing.

Switching gears from Dynacor Gold Mines, 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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