Shareholders Will Probably Hold Off On Increasing Golconda Gold Ltd.'s (CVE:GG) CEO Compensation For The Time Being

Key Insights

• Golconda Gold to hold its Annual General Meeting on 6th of June
• Total pay for CEO Nick Brodie includes US$342.0k salary
• Total compensation is 147% above industry average
• Over the past three years, Golconda Gold's EPS grew by 56% and over the past three years, the total loss to shareholders 79%

Shareholders of Golconda Gold Ltd. (CVE:GG) will have been dismayed by the negative share price return over the last three years. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. These are some of the concerns that shareholders may want to bring up at the next AGM held on 6th of June. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

See our latest analysis for Golconda Gold

How Does Total Compensation For Nick Brodie Compare With Other Companies In The Industry?

According to our data, Golconda Gold Ltd. has a market capitalization of CA$17m, and paid its CEO total annual compensation worth US$342k over the year to December 2023. We note that's an increase of 15% above last year. It is worth noting that the CEO compensation consists entirely of the salary, worth US$342k.

For comparison, other companies in the Canadian Metals and Mining industry with market capitalizations below CA$274m, reported a median total CEO compensation of US$138k. This suggests that Nick Brodie is paid more than the median for the industry. Moreover, Nick Brodie also holds CA$252k worth of Golconda Gold stock directly under their own name.

Talking in terms of the industry, salary represented approximately 94% of total compensation out of all the companies we analyzed, while other remuneration made up 6% of the pie. On a company level, Golconda Gold prefers to reward its CEO through a salary, opting not to pay Nick Brodie through non-salary benefits. 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 Golconda Gold Ltd.'s Growth Numbers

Over the past three years, Golconda Gold Ltd. has seen its earnings per share (EPS) grow by 56% per year. In the last year, its revenue is down 29%.

This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. 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 Golconda Gold Ltd. Been A Good Investment?

The return of -79% over three years would not have pleased Golconda Gold Ltd. shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Golconda Gold rewards its CEO solely through a salary, ignoring non-salary benefits completely. Shareholders have not seen their shares grow in value, rather they have seen their shares decline. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for Golconda Gold (2 are significant!) that you should be aware of before investing here.

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.