Tony Makuch has been the CEO of Kirkland Lake Gold Ltd. (TSE:KL) since 2016, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
How Does Total Compensation For Tony Makuch Compare With Other Companies In The Industry?
Our data indicates that Kirkland Lake Gold Ltd. has a market capitalization of CA$17b, and total annual CEO compensation was reported as CA$3.6m for the year to December 2019. That's a notable increase of 14% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CA$725k.
In comparison with other companies in the industry with market capitalizations over CA$11b , the reported median total CEO compensation was CA$4.1m. So it looks like Kirkland Lake Gold compensates Tony Makuch in line with the median for the industry. Furthermore, Tony Makuch directly owns CA$4.0m worth of shares in the company, implying that they are deeply invested in the company's success.
Speaking on an industry level, nearly 85% of total compensation represents salary, while the remainder of 15% is other remuneration. In Kirkland Lake Gold's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Kirkland Lake Gold Ltd.'s Growth
Kirkland Lake Gold Ltd. has seen its earnings per share (EPS) increase by 83% a year over the past three years. It achieved revenue growth of 77% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Kirkland Lake Gold Ltd. Been A Good Investment?
Boasting a total shareholder return of 304% over three years, Kirkland Lake Gold Ltd. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.
As we touched on above, Kirkland Lake Gold Ltd. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. Investors would surely be happy to see that returns have been great, and that EPS is up. Indeed, many might consider that Tony is compensated rather modestly, given the solid company performance! Also, such solid returns might lead to shareholders warming to the idea of a bump in pay.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Kirkland Lake Gold that you should be aware of before investing.
Switching gears from Kirkland Lake Gold, 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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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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