What Can We Learn About Starcore International Mines' (TSE:SAM) CEO Compensation?

Robert Eadie became the CEO of Starcore International Mines Ltd. (TSE:SAM) in 2010, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Starcore International Mines.

View our latest analysis for Starcore International Mines

How Does Total Compensation For Robert Eadie Compare With Other Companies In The Industry?

At the time of writing, our data shows that Starcore International Mines Ltd. has a market capitalization of CA$14m, and reported total annual CEO compensation of CA$291k for the year to April 2020. That's a notable decrease of 25% on last year. Notably, the salary which is CA$270.0k, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below CA$262m, reported a median total CEO compensation of CA$155k. Hence, we can conclude that Robert Eadie is remunerated higher than the industry median. Moreover, Robert Eadie also holds CA$1.0m worth of Starcore International Mines stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 88% of total compensation out of all the companies we analyzed, while other remuneration made up 12% of the pie. Although there is a difference in how total compensation is set, Starcore International Mines more or less reflects the market in terms of setting the salary. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at Starcore International Mines Ltd.'s Growth Numbers

Starcore International Mines Ltd. has reduced its earnings per share by 21% a year over the last three years. In the last year, its revenue is down 7.0%.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Starcore International Mines Ltd. Been A Good Investment?

Starcore International Mines Ltd. has not done too badly by shareholders, with a total return of 5.7%, over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

As we touched on above, Starcore International Mines Ltd. is currently paying its CEO higher than the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. This doesn't look great when you realize that the company has been suffering from negative EPS growth for the last three years. And while shareholder returns have been respectable, they have hardly been superb. So we think more research is needed, but we don't think the CEO is underpaid.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 4 warning signs for Starcore International Mines you should be aware of, and 1 of them makes us a bit uncomfortable.

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.

When trading Starcore International Mines or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

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