Paul Gorman has been the CEO of Great Lakes Graphite Inc (CVE:GLK) since 2013. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Then we’ll look at a snap shot of the business growth. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Paul Gorman’s Compensation Compare With Similar Sized Companies?
Our data indicates that Great Lakes Graphite Inc is worth CA$3.3m, and total annual CEO compensation is CA$141k. (This figure is for the year to 2016). We think total compensation is more important but we note that the CEO salary is lower, at CA$120k. We looked at a group of companies with market capitalizations under CA$267m, and the median CEO compensation was CA$155k.
So Paul Gorman is paid around the average of the companies we looked at. While this data point isn’t particularly informative alone, it gains more meaning when considered with business performance. Take a look at Great Lakes Graphite’s growth trajectory by checking out this more detailed historical graph of earnings, revenue and cash flow.
The graphic below shows how CEO compensation at Great Lakes Graphite has changed from year to year.
Is Great Lakes Graphite Inc Growing?
On average over the last three years, Great Lakes Graphite Inc has shrunk earnings per share by 28% each year. In the last year, its revenue is down -96%.
Sadly for shareholders, earnings per share are actually down, over three years. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO.
Has Great Lakes Graphite Inc Been A Good Investment?
With a three year total loss of 67%, Great Lakes Graphite Inc would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.
Paul Gorman is paid around what is normal the leaders of comparable size companies.
Returns have been disappointing and the company is not growing its earnings per share. Few would argue that it’s wise for the company to pay any more, before returns improve. Whatever your view on compensation, you might want to check if insiders are buying or selling Great Lakes Graphite shares (free trial).
If you want to buy a stock that is better than Great Lakes Graphite, this free list of high return, low debt companies is a great place to look.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.