What Does Major Drilling Group International's (TSE:MDI) CEO Pay Reveal?

Denis Larocque has been the CEO of Major Drilling Group International Inc. (TSE:MDI) since 2015, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Major Drilling Group International.

See our latest analysis for Major Drilling Group International

Comparing Major Drilling Group International Inc.'s CEO Compensation With the industry

At the time of writing, our data shows that Major Drilling Group International Inc. has a market capitalization of CA$538m, and reported total annual CEO compensation of CA$915k for the year to April 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 CA$400k.

For comparison, other companies in the same industry with market capitalizations ranging between CA$264m and CA$1.1b had a median total CEO compensation of CA$919k. This suggests that Major Drilling Group International remunerates its CEO largely in line with the industry average. Furthermore, Denis Larocque directly owns CA$420k worth of shares in the company.

On an industry level, roughly 85% of total compensation represents salary and 15% is other remuneration. Major Drilling Group International pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Major Drilling Group International Inc.'s Growth Numbers

Over the last three years, Major Drilling Group International Inc. has shrunk its earnings per share by 19% per year. It saw its revenue drop 5.7% over the last year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Major Drilling Group International Inc. Been A Good Investment?

Since shareholders would have lost about 5.5% over three years, some Major Drilling Group International Inc. investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

In Summary...

As we noted earlier, Major Drilling Group International pays its CEO in line with similar-sized companies belonging to the same industry. In the meantime, the company has reported declining EPS growth and shareholder returns over the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.

Whatever your view on compensation, you might want to check if insiders are buying or selling Major Drilling Group International shares (free trial).

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.

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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