It Looks Like The CEO Of Imperial Metals Corporation (TSE:III) May Be Underpaid Compared To Peers

By
Simply Wall St
Published
May 19, 2021
TSX:III
Source: Shutterstock

Shareholders will be pleased by the impressive results for Imperial Metals Corporation (TSE:III) recently and CEO J. Kynoch has played a key role. This would be kept in mind at the upcoming AGM on 26 May 2021 which will be a chance for them to hear the board review the financial results, discuss future company strategy and vote on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and probably deserves a well-earned pay rise.

View our latest analysis for Imperial Metals

Comparing Imperial Metals Corporation's CEO Compensation With the industry

Our data indicates that Imperial Metals Corporation has a market capitalization of CA$659m, and total annual CEO compensation was reported as CA$511k for the year to December 2020. That's a notable increase of 11% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at CA$244k.

On examining similar-sized companies in the industry with market capitalizations between CA$241m and CA$964m, we discovered that the median CEO total compensation of that group was CA$750k. That is to say, J. Kynoch is paid under the industry median. What's more, J. Kynoch holds CA$6.8m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20202019Proportion (2020)
Salary CA$244k CA$302k 48%
Other CA$267k CA$160k 52%
Total CompensationCA$511k CA$461k100%

On an industry level, around 94% of total compensation represents salary and 6% is other remuneration. In Imperial Metals' 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.

ceo-compensation
TSX:III CEO Compensation May 19th 2021

Imperial Metals Corporation's Growth

Imperial Metals Corporation has seen its earnings per share (EPS) increase by 17% a year over the past three years. It achieved revenue growth of 78% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Imperial Metals Corporation Been A Good Investment?

We think that the total shareholder return of 174%, over three years, would leave most Imperial Metals Corporation shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Given the improved performance, shareholders may be more forgiving of CEO compensation in the upcoming AGM. However, despite the strong growth in earnings and share price growth, the focus for shareholders would be how the company plans to steer the company towards sustainable profitability in the near future.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 1 warning sign for Imperial Metals that investors should look into moving forward.

Switching gears from Imperial Metals, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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