In 2017 George Burns was appointed CEO of Eldorado Gold Corporation (TSE:ELD). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does George Burns’s Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Eldorado Gold Corporation has a market cap of CA$1.6b, and reported total annual CEO compensation of US$4.0m for the year to December 2018. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$1.0m. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of CA$1.3b to CA$4.2b. The median total CEO compensation was CA$2.8m.
As you can see, George Burns is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Eldorado Gold Corporation is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Eldorado Gold has changed over time.
Is Eldorado Gold Corporation Growing?
On average over the last three years, Eldorado Gold Corporation has grown earnings per share (EPS) by 15% each year (using a line of best fit). In the last year, its revenue is up 11%.
This shows that the company has improved itself over the last few years. Good news for shareholders. It’s also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. You might want to check this free visual report on analyst forecasts for future earnings.
Has Eldorado Gold Corporation Been A Good Investment?
Since shareholders would have lost about 58% over three years, some Eldorado Gold Corporation shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn’t be too generous with CEO compensation.
We compared the total CEO remuneration paid by Eldorado Gold Corporation, and compared it to remuneration at a group of similar sized companies. 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. However, the returns to investors are far less impressive, over the same period. While EPS is positive, we’d say shareholders would want better returns before the CEO is paid much more. So you may want to check if insiders are buying Eldorado Gold shares with their own money (free access).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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