Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
In 2016 Alan T. Hair was appointed CEO of Hudbay Minerals Inc. (TSE:HBM). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we’ll consider growth that the business demonstrates. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Alan T. Hair’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Hudbay Minerals Inc. has a market cap of CA$2.1b, and is paying total annual CEO compensation of US$4.2m. (This is based on the year to 2017). We think total compensation is more important but we note that the CEO salary is lower, at US$750k. We examined companies with market caps from CA$1.3b to CA$4.2b, and discovered that the median CEO compensation of that group was CA$2.8m.
As you can see, Alan T. Hair is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Hudbay Minerals Inc. is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at Hudbay Minerals has changed over time.
Is Hudbay Minerals Inc. Growing?
On average over the last three years, Hudbay Minerals Inc. has grown earnings per share (EPS) by 111% each year (using a line of best fit). Its revenue is up 16% over last year.
This demonstrates that the company has been improving recently. A good result. It’s a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. You might want to check this free visual report on analyst forecasts for future earnings.
Has Hudbay Minerals Inc. Been A Good Investment?
Most shareholders would probably be pleased with Hudbay Minerals Inc. for providing a total return of 227% 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.
We compared total CEO remuneration at Hudbay Minerals Inc. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
However we must not forget that the EPS growth has been very strong over three years. Even better, returns to shareholders have been plentiful, over the same time period. So, considering this good performance, the CEO compensation may be quite appropriate. CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Hudbay Minerals (free visualization of insider trades).
If you want to buy a stock that is better than Hudbay Minerals, this free list of high return, low debt companies is a great place to look.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.