Increases to Mountain Province Diamonds Inc.'s (TSE:MPVD) CEO Compensation Might Cool off for now

Key Insights

• Mountain Province Diamonds to hold its Annual General Meeting on 27th of June
• Salary of CA$600.0k is part of CEO Mark Wall's total remuneration
• Total compensation is 488% above industry average
• Mountain Province Diamonds' EPS grew by 13% over the past three years while total shareholder loss over the past three years was 61%

The underwhelming share price performance of Mountain Province Diamonds Inc. (TSE:MPVD) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. The AGM coming up on the 27th of June could be an opportunity for shareholders to bring these concerns to the board's attention. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Mountain Province Diamonds

Comparing Mountain Province Diamonds Inc.'s CEO Compensation With The Industry

Our data indicates that Mountain Province Diamonds Inc. has a market capitalization of CA$40m, and total annual CEO compensation was reported as CA$1.1m for the year to December 2023. Notably, that's a decrease of 44% over the year before. Notably, the salary which is CA$600.0k, represents a considerable chunk of the total compensation being paid.

In comparison with other companies in the Canadian Metals and Mining industry with market capitalizations under CA$274m, the reported median total CEO compensation was CA$189k. This suggests that Mark Wall is paid more than the median for the industry.

Component	2023	2022	Proportion (2023)
Salary	CA$600k	CA$600k	54%
Other	CA$513k	CA$1.4m	46%
Total Compensation	CA$1.1m	CA$2.0m	100%

On an industry level, roughly 95% of total compensation represents salary and 5% is other remuneration. In Mountain Province Diamonds' case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Mountain Province Diamonds Inc.'s Growth

Mountain Province Diamonds Inc.'s earnings per share (EPS) grew 13% per year over the last three years. It saw its revenue drop 33% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Mountain Province Diamonds Inc. Been A Good Investment?

With a total shareholder return of -61% over three years, Mountain Province Diamonds Inc. shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Mountain Province Diamonds that investors should think about before committing capital to this stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com