The Compensation For Hecla Mining Company's (NYSE:HL) CEO Looks Deserved And Here's Why

By
Simply Wall St
Published
May 12, 2021
NYSE:HL

The performance at Hecla Mining Company (NYSE:HL) has been quite strong recently and CEO Phillips Baker has played a role in it. Shareholders will have this at the front of their minds in the upcoming AGM on 19 May 2021. This would also be a chance for them to hear the board review the financial results, discuss future company strategy and vote on any resolutions such as executive remuneration. In light of the great performance, we discuss the case why we think CEO compensation is not excessive.

Check out our latest analysis for Hecla Mining

Comparing Hecla Mining Company's CEO Compensation With the industry

Our data indicates that Hecla Mining Company has a market capitalization of US$3.9b, and total annual CEO compensation was reported as US$5.2m for the year to December 2020. That's mostly flat as compared to the prior year's compensation. While we always look at total compensation first, our analysis shows that the salary component is less, at US$635k.

On examining similar-sized companies in the industry with market capitalizations between US$2.0b and US$6.4b, we discovered that the median CEO total compensation of that group was US$5.5m. From this we gather that Phillips Baker is paid around the median for CEOs in the industry. What's more, Phillips Baker holds US$21m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20202019Proportion (2020)
Salary US$635k US$635k 12%
Other US$4.6m US$4.4m 88%
Total CompensationUS$5.2m US$5.1m100%

On an industry level, roughly 36% of total compensation represents salary and 64% is other remuneration. In Hecla Mining's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
NYSE:HL CEO Compensation May 13th 2021

A Look at Hecla Mining Company's Growth Numbers

Hecla Mining Company's earnings per share (EPS) grew 15% per year over the last three years. In the last year, its revenue is up 16%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Hecla Mining Company Been A Good Investment?

We think that the total shareholder return of 87%, over three years, would leave most Hecla Mining Company shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Seeing that company performance has been quite good recently, some shareholders may feel that CEO compensation may not be the biggest focus in the upcoming AGM. Seeing that earnings growth and share price performance seems to be on the right path, the more pressing focus for shareholders at the AGM may be how the board and management plans to turn the company into a sustainably profitable one.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 2 warning signs for Hecla Mining that investors should be aware of in a dynamic business environment.

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. 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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