Denis Larocque has been the CEO of Major Drilling Group International Inc. (TSE:MDI) since 2015, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Major Drilling Group International pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing Major Drilling Group International Inc.'s CEO Compensation With the industry
Our data indicates that Major Drilling Group International Inc. has a market capitalization of CA$606m, and total annual CEO compensation was reported as CA$915k for the year to April 2020. That's mostly flat as compared to the prior year's compensation. We think total compensation is more important but our data shows that the CEO salary is lower, at CA$400k.
In comparison with other companies in the industry with market capitalizations ranging from CA$259m to CA$1.0b, the reported median CEO total compensation was CA$955k. This suggests that Major Drilling Group International remunerates its CEO largely in line with the industry average. Furthermore, Denis Larocque directly owns CA$475k worth of shares in the company.
Talking in terms of the industry, salary represented approximately 93% of total compensation out of all the companies we analyzed, while other remuneration made up 7.1% of the pie. In Major Drilling Group International'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 Major Drilling Group International Inc.'s Growth Numbers
Over the last three years, Major Drilling Group International Inc. has shrunk its earnings per share by 46% per year. Its revenue is down 11% over the previous year.
The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has Major Drilling Group International Inc. Been A Good Investment?
Major Drilling Group International Inc. has not done too badly by shareholders, with a total return of 9.3%, over three years. But they would probably prefer not to see CEO compensation far in excess of the median.
As previously discussed, Denis is compensated close to the median for companies of its size, and which belong to the same industry. According to our analysis, Major Drilling Group International is suffering from uninspiring EPS growth, and even though shareholder returns are stable, they are hardly impressive. This doesn't compare well with CEO compensation, which is close to the industry median. Considering all of this, we can't say the CEO is underpaid, and moving forward shareholders will likely want to see higher growth to justify any raise.
CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Major Drilling Group International (free visualization of insider trades).
Switching gears from Major Drilling Group International, 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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