It Looks Like Shareholders Would Probably Approve First Majestic Silver Corp.'s (TSE:FR) CEO Compensation Package

The performance at First Majestic Silver Corp. (TSE:FR) has been quite strong recently and CEO Keith Neumeyer has played a role in it. Coming up to the next AGM on 27 May 2021, shareholders would be keeping this in mind. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. Here is our take on why we think CEO compensation is not extravagant.

View our latest analysis for First Majestic Silver

Comparing First Majestic Silver Corp.'s CEO Compensation With the industry

At the time of writing, our data shows that First Majestic Silver Corp. has a market capitalization of CA$5.4b, and reported total annual CEO compensation of US$3.3m for the year to December 2020. We note that's a small decrease of 6.0% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$950k.

In comparison with other companies in the industry with market capitalizations ranging from CA$2.4b to CA$7.7b, the reported median CEO total compensation was US$3.6m. From this we gather that Keith Neumeyer is paid around the median for CEOs in the industry. Furthermore, Keith Neumeyer directly owns CA$79m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, roughly 94% of total compensation represents salary and 6% is other remuneration. In First Majestic Silver's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at First Majestic Silver Corp.'s Growth Numbers

First Majestic Silver Corp.'s earnings per share (EPS) grew 53% per year over the last three years. It achieved revenue growth of 4.2% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 First Majestic Silver Corp. Been A Good Investment?

We think that the total shareholder return of 126%, over three years, would leave most First Majestic Silver Corp. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Given the improved performance, shareholders may be more forgiving of CEO compensation in the upcoming AGM. In saying that, some shareholders may feel that the more important issues to be addressed may be how the management plans to steer the company towards sustainable profitability in the future.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 2 warning signs for First Majestic Silver that investors should think about before committing capital to this stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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