Pan American Silver Corp.'s (TSE:PAAS) CEO Compensation Looks Acceptable To Us And Here's Why

Performance at Pan American Silver Corp. (TSE:PAAS) has been reasonably good and CEO Michael Steinmann has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 12 May 2021. Here is our take on why we think the CEO compensation looks appropriate.

See our latest analysis for Pan American Silver

How Does Total Compensation For Michael Steinmann Compare With Other Companies In The Industry?

According to our data, Pan American Silver Corp. has a market capitalization of CA$8.6b, and paid its CEO total annual compensation worth US$4.4m over the year to December 2020. That's a notable increase of 25% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$802k.

On examining similar-sized companies in the industry with market capitalizations between CA$4.9b and CA$15b, we discovered that the median CEO total compensation of that group was US$4.9m. So it looks like Pan American Silver compensates Michael Steinmann in line with the median for the industry. What's more, Michael Steinmann holds CA$4.0m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

On an industry level, roughly 95% of total compensation represents salary and 5% is other remuneration. Pan American Silver sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Pan American Silver Corp.'s Growth Numbers

Pan American Silver Corp.'s earnings per share (EPS) grew 2.3% per year over the last three years. The trailing twelve months of revenue was pretty much the same as the prior period.

We would argue that the lack of revenue growth in the last year is less than ideal, but it is good to see a modest EPS growth at least. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Pan American Silver Corp. Been A Good Investment?

Boasting a total shareholder return of 99% over three years, Pan American Silver Corp. has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, we still think that any proposed increase in CEO compensation will be examined closely to make sure the compensation is appropriate and linked to performance.

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 investors should think about before committing capital to this stock.

Switching gears from Pan American Silver, 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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