| Is NGEx Resources Inc’s (TSX:NGQ) CEO Salary Justified? | |
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Is NGQ overpaying the CEO?Even though there is no cookie-cutter approach, since compensation should be tailored to the specific company and market, we can evaluate a high-level benchmark to see if NGQ is an outlier. This outcome can help shareholders ask the right question about Wodzicki ’s incentive alignment. Normally, a Canadian small-cap is worth around $345M, generates earnings of $24M, and pays its CEO circa $770,000 per annum. Usually I would use earnings and market cap to account for variations in performance, however, NGQ’s negative earnings reduces the usefulness of my formula. Analyzing the range of remuneration for small-cap executives, it seems like Wodzicki is paid aptly compared to those in similar-sized companies. Putting everything together, though NGQ is loss-making, it seems like the CEO’s pay is fair. What this means for you:Are you a shareholder? My conclusion is that Wodzicki is not being overpaid. But your role as a shareholder should not end here. As above, this is a relatively simplistic calculation using high-level benchmarket. Proactive shareholders should question their representatives (i.e. the board of directors) how they think about the CEO’s incentive alignment with shareholders and how they balance this with retention and reward. To find out more about NGQ’s governance, look through our infographic report of the company’s board and management. Are you a potential investor? Board members are the voice of shareholders. Although CEO pay doesn’t necessarily make a big dent in your investment thesis in NGQ, proper governance on behalf of your investment should be a key concern. These decisions made by top management and directors flow down into financials which impact returns to investors. To research more about these fundamentals, I recommend you check out our simple infographic report on NGQ’s financial metrics. PS. If you are not interested in NGEx Resources anymore, you can use our free platform to see my list of over 50 sustainable companies producing great returns. To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements. The author is an independent contributor and at the time of publication had no position in the stocks mentioned. |
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Ngex Resources Inc.
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EXPLORATION STAGE |
CODE : NGQ.TO |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
Ngex is a zinc and gold exploration company based in Canada. Ngex holds various exploration projects in Colombia. Its main exploration properties are CERRO CUADRADO, FILO DEL SOL and JOSEMARÍA in Argentina, MOULE and NYIEME in Burkina Faso, ZYMO and GJ KINASKAN in Canada, LINQUE 1, LINQUE 2, TALADRO 1 and TALADRO 2 in Peru, LOS HELADOS in Chile, HAMBOK in Eritrea and MANDÉ and PIEDRANCHA in Colombia. Ngex is listed in Canada. Its market capitalisation is CA$ 237.0 millions as of today (US$ 175.9 millions, € 157.0 millions). Its stock quote reached its lowest recent point on February 06, 2009 at CA$ 0.21, and its highest recent level on September 23, 2011 at CA$ 4.00. Ngex has 213 470 000 shares outstanding. |