Most Shareholders Will Probably Agree With Scorpio Gold Corporation's (CVE:SGN) CEO Compensation

Despite strong share price growth of 125% for Scorpio Gold Corporation (CVE:SGN) over the last few years, earnings growth has been disappointing, which suggests something is amiss. The upcoming AGM on 25 October 2021 may be an opportunity for shareholders to bring up any concerns they may have for the board’s attention. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

View our latest analysis for Scorpio Gold

Comparing Scorpio Gold Corporation's CEO Compensation With the industry

According to our data, Scorpio Gold Corporation has a market capitalization of CA$10m, and paid its CEO total annual compensation worth US$156k over the year to December 2020. That's a notable decrease of 24% on last year. It is worth noting that the CEO compensation consists entirely of the salary, worth US$156k.

On comparing similar-sized companies in the industry with market capitalizations below CA$247m, we found that the median total CEO compensation was US$131k. This suggests that Scorpio Gold remunerates its CEO largely in line with the industry average. What's more, Brian Lock holds CA$206k worth of shares in the company in their own name.

Component	2020	2019	Proportion (2020)
Salary	US$156k	US$204k	100%
Other	-	-	-
Total Compensation	US$156k	US$204k	100%

Talking in terms of the industry, salary represented approximately 85% of total compensation out of all the companies we analyzed, while other remuneration made up 15% of the pie. Speaking on a company level, Scorpio Gold prefers to tread along a traditional path, disbursing all compensation through a salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Scorpio Gold Corporation's Growth

Over the last three years, Scorpio Gold Corporation has shrunk its earnings per share by 28% per year. It saw its revenue drop 20% over the last year.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Scorpio Gold Corporation Been A Good Investment?

We think that the total shareholder return of 125%, over three years, would leave most Scorpio Gold Corporation shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Scorpio Gold pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

CEO pay is simply one of the many factors that need to be considered while examining business performance. In our study, we found 5 warning signs for Scorpio Gold you should be aware of, and 2 of them can't be ignored.

Important note: Scorpio Gold 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.

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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