Jorge Ganoza Durant became the CEO of Fortuna Silver Mines Inc. (TSE:FVI) in 2008. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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 Jorge Ganoza Durant’s Compensation Compare With Similar Sized Companies?
Our data indicates that Fortuna Silver Mines Inc. is worth CA$718m, and total annual CEO compensation is US$2.4m. (This figure is for the year to December 2017). While we always look at total compensation first, we note that the salary component is less, at US$600k. We examined companies with market caps from US$200m to US$800m, and discovered that the median CEO total compensation of that group was US$981k.
As you can see, Jorge Ganoza Durant is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Fortuna Silver Mines 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 Fortuna Silver Mines, below.
Is Fortuna Silver Mines Inc. Growing?
Over the last three years Fortuna Silver Mines Inc. has grown its earnings per share (EPS) by an average of 79% per year (using a line of best fit). It saw its revenue drop -1.8% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. Revenue growth is a real positive for growth, but ultimately profits are more important. It could be important to check this free visual depiction of what analysts expect for the future.
Has Fortuna Silver Mines Inc. Been A Good Investment?
Since shareholders would have lost about 29% over three years, some Fortuna Silver Mines Inc. shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
We compared total CEO remuneration at Fortuna Silver Mines Inc. with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
However, the earnings per share growth over three years is certainly impressive. On the other hand returns to investors over the same period have probably disappointed many. One might thus conclude that it would be better if the company waited until growth is reflected in the share price, before increasing CEO compensation. So you may want to check if insiders are buying Fortuna Silver Mines shares with their own money (free access).
If you want to buy a stock that is better than Fortuna Silver Mines, this free list of high return, low debt companies is a great place to look.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.