Here's Why Shareholders May Want To Be Cautious With Increasing Yamana Gold Inc.'s (TSE:YRI) CEO Pay Packet

Performance at Yamana Gold Inc. (TSE:YRI) has been reasonably good and CEO Daniel Racine has done a decent job of steering the company in the right direction. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 29 April 2021. However, some shareholders may still want to keep CEO compensation within reason.

View our latest analysis for Yamana Gold

Comparing Yamana Gold Inc.'s CEO Compensation With the industry

According to our data, Yamana Gold Inc. has a market capitalization of CA$5.8b, and paid its CEO total annual compensation worth US$5.4m over the year to December 2020. That's just a smallish increase of 4.9% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.0m.

For comparison, other companies in the same industry with market capitalizations ranging between CA$2.5b and CA$8.0b had a median total CEO compensation of US$3.5m. This suggests that Daniel Racine is paid more than the median for the industry. What's more, Daniel Racine holds CA$3.6m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2020	2019	Proportion (2020)
Salary	US$1.0m	US$1.0m	19%
Other	US$4.4m	US$4.2m	81%
Total Compensation	US$5.4m	US$5.2m	100%

On an industry level, around 95% of total compensation represents salary and 5% is other remuneration. It's interesting to note that Yamana Gold allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Yamana Gold Inc.'s Growth

Yamana Gold Inc.'s earnings per share (EPS) grew 97% per year over the last three years. Its revenue is down 3.1% over the previous year.

Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Yamana Gold Inc. Been A Good Investment?

We think that the total shareholder return of 69%, over three years, would leave most Yamana Gold Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Seeing that the company has put up a decent performance, only a few shareholders, if any at all, might have questions about the CEO pay in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

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. We've identified 3 warning signs for Yamana Gold that investors should be aware of in a dynamic business environment.

Switching gears from Yamana Gold, 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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