What Can We Learn About Wheaton Precious Metals' (TSE:WPM) CEO Compensation?

Simply Wall St
October 28, 2020

This article will reflect on the compensation paid to Randy V. Smallwood who has served as CEO of Wheaton Precious Metals Corp. (TSE:WPM) since 2011. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Wheaton Precious Metals

How Does Total Compensation For Randy V. Smallwood Compare With Other Companies In The Industry?

At the time of writing, our data shows that Wheaton Precious Metals Corp. has a market capitalization of CA$28b, and reported total annual CEO compensation of CA$4.1m for the year to December 2019. That's a slightly lower by 7.2% over the previous year. While we always look at total compensation first, our analysis shows that the salary component is less, at CA$827k.

On comparing similar companies in the industry with market capitalizations above CA$11b, we found that the median total CEO compensation was CA$4.1m. So it looks like Wheaton Precious Metals compensates Randy V. Smallwood in line with the median for the industry. Furthermore, Randy V. Smallwood directly owns CA$13m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20192018Proportion (2019)
Salary CA$827k CA$749k 20%
Other CA$3.2m CA$3.6m 80%
Total CompensationCA$4.1m CA$4.4m100%

Talking in terms of the industry, salary represented approximately 85% of total compensation out of all the companies we analyzed, while other remuneration made up 15% of the pie. Wheaton Precious Metals 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.

TSX:WPM CEO Compensation October 28th 2020

A Look at Wheaton Precious Metals Corp.'s Growth Numbers

Over the past three years, Wheaton Precious Metals Corp. has seen its earnings per share (EPS) grow by 16% per year. It achieved revenue growth of 19% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. 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 Wheaton Precious Metals Corp. Been A Good Investment?

Boasting a total shareholder return of 146% over three years, Wheaton Precious Metals 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...

As we noted earlier, Wheaton Precious Metals pays its CEO in line with similar-sized companies belonging to the same industry. Few would be critical of the leadership, since returns have been juicy and EPS are moving in the right direction. So one could argue that CEO compensation is quite modest, if you consider company performance! In fact, shareholders might even think the CEO deserves a raise as a reward due to the fantastic returns generated.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We've identified 1 warning sign for Wheaton Precious Metals that investors should be aware of in a dynamic business environment.

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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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.
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