Why Hecla Mining's (NYSE:HL) CEO Pay Matters

This article will reflect on the compensation paid to Phillips Baker who has served as CEO of Hecla Mining Company (NYSE:HL) since 2003. This analysis will also assess whether Hecla Mining pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Hecla Mining

How Does Total Compensation For Phillips Baker Compare With Other Companies In The Industry?

Our data indicates that Hecla Mining Company has a market capitalization of US$3.3b, and total annual CEO compensation was reported as US$5.1m for the year to December 2019. Notably, that's an increase of 38% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$635k.

In comparison with other companies in the industry with market capitalizations ranging from US$2.0b to US$6.4b, the reported median CEO total compensation was US$5.6m. So it looks like Hecla Mining compensates Phillips Baker in line with the median for the industry. Moreover, Phillips Baker also holds US$21m worth of Hecla Mining stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 36% of total compensation out of all the companies we analyzed, while other remuneration made up 64% of the pie. It's interesting to note that Hecla Mining allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Hecla Mining Company's Growth Numbers

Over the last three years, Hecla Mining Company has shrunk its earnings per share by 38% per year. In the last year, its revenue is up 24%.

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. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Hecla Mining Company Been A Good Investment?

We think that the total shareholder return of 59%, over three years, would leave most Hecla Mining Company shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

As we noted earlier, Hecla Mining pays its CEO in line with similar-sized companies belonging to the same industry. Shareholder returns for the company have been strong for the last three years. Meanwhile, revenues have been increasing recently On a sour note, EPS growth has been negative. Overall, the company's performance hasn't been that disappointing for us to object the CEO compensation.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. 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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