We Think Shareholders May Want To Consider A Review Of Sandstorm Gold Ltd.'s (TSE:SSL) CEO Compensation Package

Key Insights

• Sandstorm Gold to hold its Annual General Meeting on 21st of June
• Salary of US$408.3k is part of CEO Nolan Watson's total remuneration
• The overall pay is comparable to the industry average
• Sandstorm Gold's EPS declined by 22% over the past three years while total shareholder loss over the past three years was 25%

Sandstorm Gold Ltd. (TSE:SSL) has not performed well recently and CEO Nolan Watson will probably need to up their game. At the upcoming AGM on 21st of June, shareholders can hear from the board including their plans for turning around performance. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for Sandstorm Gold

Comparing Sandstorm Gold Ltd.'s CEO Compensation With The Industry

According to our data, Sandstorm Gold Ltd. has a market capitalization of CA$2.2b, and paid its CEO total annual compensation worth US$1.8m over the year to December 2023. That's a notable decrease of 41% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$408k.

On examining similar-sized companies in the Canadian Metals and Mining industry with market capitalizations between CA$1.4b and CA$4.4b, we discovered that the median CEO total compensation of that group was US$2.4m. This suggests that Sandstorm Gold remunerates its CEO largely in line with the industry average. Moreover, Nolan Watson also holds CA$10m worth of Sandstorm Gold stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	US$408k	US$354k	23%
Other	US$1.3m	US$2.6m	77%
Total Compensation	US$1.8m	US$3.0m	100%

On an industry level, roughly 94% of total compensation represents salary and 6% is other remuneration. Sandstorm Gold pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Sandstorm Gold Ltd.'s Growth Numbers

Over the last three years, Sandstorm Gold Ltd. has shrunk its earnings per share by 22% per year. It achieved revenue growth of 13% over the last year.

The decline in EPS is a bit concerning. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that EPS has gone backwards over three years. 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 Sandstorm Gold Ltd. Been A Good Investment?

With a three year total loss of 25% for the shareholders, Sandstorm Gold Ltd. would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 2 warning signs for Sandstorm Gold that investors should think about before committing capital to this stock.

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.

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