Here's Why Shareholders May Want To Be Cautious With Increasing Newmont Corporation's (NYSE:NEM) CEO Pay Packet

Key Insights

• Newmont will host its Annual General Meeting on 30th of April
• CEO Tom Palmer's total compensation includes salary of US$1.49m
• The total compensation is similar to the average for the industry
• Newmont's EPS grew by 28% over the past three years while total shareholder loss over the past three years was 16%

Our free stock report includes 2 warning signs investors should be aware of before investing in Newmont. Read for free now.

The underwhelming share price performance of Newmont Corporation (NYSE:NEM) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 30th of April. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for Newmont

Comparing Newmont Corporation's CEO Compensation With The Industry

At the time of writing, our data shows that Newmont Corporation has a market capitalization of US$62b, and reported total annual CEO compensation of US$13m for the year to December 2024. That's a notable increase of 10% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$1.5m.

In comparison with other companies in the American Metals and Mining industry with market capitalizations over US$8.0b, the reported median total CEO compensation was US$11m. From this we gather that Tom Palmer is paid around the median for CEOs in the industry. Furthermore, Tom Palmer directly owns US$6.5m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	US$1.5m	US$1.4m	11%
Other	US$11m	US$10m	89%
Total Compensation	US$13m	US$12m	100%

On an industry level, around 34% of total compensation represents salary and 66% is other remuneration. In Newmont's case, non-salary compensation represents a greater slice of total remuneration, 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 Newmont Corporation's Growth Numbers

Newmont Corporation's earnings per share (EPS) grew 28% per year over the last three years. Its revenue is up 58% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. 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 Newmont Corporation Been A Good Investment?

With a three year total loss of 16% for the shareholders, Newmont Corporation would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At 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 will likely improve performance in the future.

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. That's why we did some digging and identified 2 warning signs for Newmont that you should be aware of before investing.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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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.