Here's Why Shareholders May Want To Be Cautious With Increasing Pan American Silver Corp.'s (TSE:PAAS) CEO Pay Packet

Key Insights

• Pan American Silver will host its Annual General Meeting on 8th of May
• Total pay for CEO Michael Steinmann includes US$1.08m salary
• Total compensation is 67% above industry average
• Pan American Silver's EPS declined by 94% over the past three years while total shareholder loss over the past three years was 33%

In the past three years, the share price of Pan American Silver Corp. (TSE:PAAS) has struggled to grow and now shareholders are sitting on a loss. Per share earnings growth is also lacking, despite revenue growth. In light of this performance, shareholders will have a chance to question the board in the upcoming AGM on 8th of May, where they can impact on future company performance by voting on resolutions, including executive compensation. Here's why we think shareholders should hold off on a raise for the CEO at the moment.

Check out our latest analysis for Pan American Silver

Comparing Pan American Silver Corp.'s CEO Compensation With The Industry

Our data indicates that Pan American Silver Corp. has a market capitalization of CA$9.2b, and total annual CEO compensation was reported as US$7.1m for the year to December 2023. That's a notable increase of 77% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.1m.

In comparison with other companies in the Canadian Metals and Mining industry with market capitalizations ranging from CA$5.5b to CA$17b, the reported median CEO total compensation was US$4.3m. Accordingly, our analysis reveals that Pan American Silver Corp. pays Michael Steinmann north of the industry median. Furthermore, Michael Steinmann directly owns CA$3.7m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	US$1.1m	US$950k	15%
Other	US$6.0m	US$3.1m	85%
Total Compensation	US$7.1m	US$4.0m	100%

On an industry level, roughly 94% of total compensation represents salary and 6% is other remuneration. It's interesting to note that Pan American Silver allocates a smaller portion of compensation to salary 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.

Pan American Silver Corp.'s Growth

Over the last three years, Pan American Silver Corp. has shrunk its earnings per share by 94% per year. It achieved revenue growth of 55% over the last year.

Investors would be a bit wary of companies that have lower EPS On the other hand, the strong revenue growth suggests the business is growing. It's hard to reach a conclusion about business performance right now. This may be one to watch. 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 Pan American Silver Corp. Been A Good Investment?

Few Pan American Silver Corp. shareholders would feel satisfied with the return of -33% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

The company's earnings haven't grown and possibly because of that, the stock has performed poorly, resulting in a loss for the company's shareholders. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Pan American Silver that you should be aware of before investing.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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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.