Should Shareholders Reconsider Americas Gold and Silver Corporation's (TSE:USA) CEO Compensation Package?

By
Simply Wall St
Published
June 03, 2021
TSX:USA
Source: Shutterstock

Shareholders will probably not be too impressed with the underwhelming results at Americas Gold and Silver Corporation (TSE:USA) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 10 June 2021. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.

View our latest analysis for Americas Gold and Silver

Comparing Americas Gold and Silver Corporation's CEO Compensation With the industry

According to our data, Americas Gold and Silver Corporation has a market capitalization of CA$275m, and paid its CEO total annual compensation worth US$873k over the year to December 2020. That's a notable decrease of 20% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$268k.

For comparison, other companies in the same industry with market capitalizations ranging between CA$121m and CA$485m had a median total CEO compensation of US$378k. Accordingly, our analysis reveals that Americas Gold and Silver Corporation pays Darren Blasutti north of the industry median. What's more, Darren Blasutti holds CA$809k worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20202019Proportion (2020)
Salary US$268k US$271k 31%
Other US$605k US$815k 69%
Total CompensationUS$873k US$1.1m100%

Speaking on an industry level, nearly 93% of total compensation represents salary, while the remainder of 7% is other remuneration. Americas Gold and Silver pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
TSX:USA CEO Compensation June 4th 2021

Americas Gold and Silver Corporation's Growth

Americas Gold and Silver Corporation has reduced its earnings per share by 50% a year over the last three years. It saw its revenue drop 36% over the last year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Americas Gold and Silver Corporation Been A Good Investment?

With a total shareholder return of -55% over three years, Americas Gold and Silver Corporation shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 3 warning signs for Americas Gold and Silver that you should be aware of before investing.

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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