Shareholders May Not Be So Generous With Eldorado Gold Corporation's (TSE:ELD) CEO Compensation And Here's Why

By
Simply Wall St
Published
June 03, 2021
TSX:ELD
Source: Shutterstock

CEO George Burns has done a decent job of delivering relatively good performance at Eldorado Gold Corporation (TSE:ELD) 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 10 June 2021. However, some shareholders will still be cautious of paying the CEO excessively.

Check out our latest analysis for Eldorado Gold

Comparing Eldorado Gold Corporation's CEO Compensation With the industry

According to our data, Eldorado Gold Corporation has a market capitalization of CA$2.6b, and paid its CEO total annual compensation worth US$4.0m over the year to December 2020. Notably, that's an increase of 13% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$785k.

In comparison with other companies in the industry with market capitalizations ranging from CA$1.2b to CA$3.9b, the reported median CEO total compensation was US$1.9m. Accordingly, our analysis reveals that Eldorado Gold Corporation pays George Burns north of the industry median. What's more, George Burns holds CA$5.8m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20202019Proportion (2020)
Salary US$785k US$771k 20%
Other US$3.2m US$2.7m 80%
Total CompensationUS$4.0m US$3.5m100%

Talking in terms of the industry, salary represented approximately 93% of total compensation out of all the companies we analyzed, while other remuneration made up 7% of the pie. Eldorado Gold 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.

ceo-compensation
TSX:ELD CEO Compensation June 4th 2021

Eldorado Gold Corporation's Growth

Eldorado Gold Corporation's earnings per share (EPS) grew 71% per year over the last three years. It achieved revenue growth of 41% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 Eldorado Gold Corporation Been A Good Investment?

Most shareholders would probably be pleased with Eldorado Gold Corporation for providing a total return of 87% 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.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for Eldorado Gold that you should be aware of before investing.

Important note: Eldorado Gold 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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Simply Wall St is focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of data scientists and multiple equity analysts with over two decades worth of financial markets experience between them.