Stock Analysis

Shareholders Will Probably Hold Off On Increasing Midland Exploration Inc.'s (CVE:MD) CEO Compensation For The Time Being

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The underwhelming share price performance of Midland Exploration Inc. (CVE:MD) in the past three years would have disappointed many shareholders. Per share earnings growth is also lacking, despite revenue growth. In light of this performance, shareholders will have a chance to question the board in the upcoming AGM on 24 February 2022, where they can impact on future company performance by voting on resolutions, including executive compensation. We think shareholders may be cautious of approving a pay rise for the CEO at the moment, based on our analysis below.

See our latest analysis for Midland Exploration

Comparing Midland Exploration Inc.'s CEO Compensation With the industry

According to our data, Midland Exploration Inc. has a market capitalization of CA$39m, and paid its CEO total annual compensation worth CA$347k over the year to September 2021. That's a modest increase of 5.3% on the prior year. Notably, the salary which is CA$271.9k, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below CA$254m, reported a median total CEO compensation of CA$166k. Accordingly, our analysis reveals that Midland Exploration Inc. pays Gino Roger north of the industry median. What's more, Gino Roger holds CA$482k worth of shares in the company in their own name.

Component20212020Proportion (2021)
Salary CA$272k CA$259k 78%
Other CA$75k CA$70k 22%
Total CompensationCA$347k CA$329k100%

On an industry level, around 87% of total compensation represents salary and 13% is other remuneration. Midland Exploration is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

TSXV:MD CEO Compensation February 18th 2022

Midland Exploration Inc.'s Growth

Midland Exploration Inc. has reduced its earnings per share by 1.3% a year over the last three years. In the last year, its revenue is up 751%.

The decrease in EPS could be a concern for some investors. But in contrast the revenue growth is strong, suggesting future potential for EPS growth. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 Midland Exploration Inc. Been A Good Investment?

The return of -55% over three years would not have pleased Midland Exploration Inc. shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

The loss to shareholders over the past three years is certainly concerning and possibly has something to do with the fact that the company's earnings haven't grown. In 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 is in line with their expectations.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 4 warning signs for Midland Exploration (of which 2 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.

Important note: Midland Exploration is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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Find out whether Midland Exploration is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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