Cogging torque is a pulsating, parasitic and undesired torque ripple intrinsic of the design of a permanent magnet synchronous generator (PMSG), which should be minimized due to its adverse effects: vibration and noise. In addition, as aerodynamic power is low during start-up at low wind speeds in small wind energy systems, the cogging torque must be as low as possible to achieve a low cut-in speed. A novel mitigation technique using compound pre-slotting, based on a combination of magnetic and non-magnetic materials, is investigated. The finite element technique is used to calculate the cogging torque of a real PMSG design for a small wind turbine, with and without using compound pre-slotting. The results show that cogging torque can be reduced by a factor of 48% with this technique, while avoiding the main drawback of the conventional pre-slotting technique: the reduction of induced voltage due to leakage flux between stator teeth. Furthermore, through a combination of pre-slotting and other cogging torque optimization techniques, 84%, cogging torque can be eliminated for a given design.