Shareholders May Be Wary Of Increasing Inca One Gold Corp.'s (CVE:INCA) CEO Compensation Package

Key Insights

• Inca One Gold's Annual General Meeting to take place on 14th of December
• Total pay for CEO Ed Kelly includes US$177.2k salary
• The overall pay is 104% above the industry average
• Inca One Gold's three-year loss to shareholders was 81% while its EPS was down 15% over the past three years

The results at Inca One Gold Corp. (CVE:INCA) have been quite disappointing recently and CEO Ed Kelly bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 14th of December. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. We present the case why we think CEO compensation is out of sync with company performance.

Check out our latest analysis for Inca One Gold

Comparing Inca One Gold Corp.'s CEO Compensation With The Industry

At the time of writing, our data shows that Inca One Gold Corp. has a market capitalization of CA$4.9m, and reported total annual CEO compensation of US$277k for the year to April 2023. We note that's a small decrease of 7.9% on last year. We note that the salary portion, which stands at US$177.2k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Canadian Metals and Mining industry with market capitalizations below CA$272m, reported a median total CEO compensation of US$136k. This suggests that Ed Kelly is paid more than the median for the industry. Furthermore, Ed Kelly directly owns CA$114k worth of shares in the company.

Component	2023	2022	Proportion (2023)
Salary	US$177k	US$187k	64%
Other	US$99k	US$114k	36%
Total Compensation	US$277k	US$300k	100%

Speaking on an industry level, nearly 94% of total compensation represents salary, while the remainder of 6% is other remuneration. It's interesting to note that Inca One Gold allocates a smaller portion of compensation to salary in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Inca One Gold Corp.'s Growth

Inca One Gold Corp. has reduced its earnings per share by 15% a year over the last three years. It saw its revenue drop 21% over the last year.

The decline in EPS is a bit concerning. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Inca One Gold Corp. Been A Good Investment?

The return of -81% over three years would not have pleased Inca One Gold Corp. shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

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, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 5 warning signs for Inca One Gold you should be aware of, and 3 of them shouldn't be ignored.

Switching gears from Inca One 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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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.