Performance at Majestic Gold Corp. (CVE:MJS) has been rather uninspiring recently and shareholders may be wondering how CEO Steve Kenwood plans to fix this. At the next AGM coming up on 08 September 2021, they can influence managerial decision making through voting on resolutions, including executive remuneration. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. In our opinion, CEO compensation does not look excessive and we discuss why.
Comparing Majestic Gold Corp.'s CEO Compensation With the industry
Our data indicates that Majestic Gold Corp. has a market capitalization of CA$63m, and total annual CEO compensation was reported as US$57k for the year to December 2020. Notably, that's a decrease of 44% over the year before. Notably, the salary which is US$53.0k, represents most of the total compensation being paid.
In comparison with other companies in the industry with market capitalizations under CA$252m, the reported median total CEO compensation was US$129k. This suggests that Steve Kenwood is paid below the industry median.
On an industry level, around 86% of total compensation represents salary and 14% is other remuneration. Majestic Gold is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. 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.
Majestic Gold Corp.'s Growth
Majestic Gold Corp.'s earnings per share (EPS) grew 24% per year over the last three years. Its revenue is up 16% over the last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Majestic Gold Corp. Been A Good Investment?
Given the total shareholder loss of 29% over three years, many shareholders in Majestic Gold Corp. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
The fact that shareholders are sitting on a loss is certainly disheartening. The share price trend has diverged with the robust growth in EPS however, suggesting there may be other factors that could be driving the price performance. There needs to be more focus by management and the board to examine why the share price has diverged from fundamentals. In the upcoming AGM, shareholders should take this opportunity to raise these concerns with the board and revisit their investment thesis with regards to the company.
While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 1 warning sign for Majestic Gold that investors should look into moving forward.
Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.
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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.
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