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The performance at Burcon NutraScience Corporation (TSE:BU) has been quite strong recently and CEO Johann Tergesen has played a role in it. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 15 September 2021. It is likely that the focus will be on company strategy going forward as shareholders hear from the board and cast their votes on resolutions such as executive remuneration and other matters. Here is our take on why we think CEO compensation is not extravagant.
How Does Total Compensation For Johann Tergesen Compare With Other Companies In The Industry?
At the time of writing, our data shows that Burcon NutraScience Corporation has a market capitalization of CA$319m, and reported total annual CEO compensation of CA$616k for the year to March 2021. Notably, that's an increase of 67% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at CA$295k.
On examining similar-sized companies in the industry with market capitalizations between CA$127m and CA$506m, we discovered that the median CEO total compensation of that group was CA$686k. From this we gather that Johann Tergesen is paid around the median for CEOs in the industry. Furthermore, Johann Tergesen directly owns CA$10m worth of shares in the company, implying that they are deeply invested in the company's success.
On an industry level, around 67% of total compensation represents salary and 33% is other remuneration. It's interesting to note that Burcon NutraScience allocates a smaller portion of compensation to salary in comparison 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 Burcon NutraScience Corporation's Growth Numbers
Burcon NutraScience Corporation's earnings per share (EPS) grew 72% per year over the last three years. In the last year, its revenue is up 1,016%.
Shareholders would be glad to know that the company has improved itself over the last few years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Burcon NutraScience Corporation Been A Good Investment?
Most shareholders would probably be pleased with Burcon NutraScience Corporation for providing a total return of 584% over three years. 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.
Seeing that company performance has been quite good recently, some shareholders may feel that CEO compensation may not be the biggest focus in the upcoming AGM. In saying that, some shareholders may feel that the more important issues to be addressed may be how the management plans to steer the company towards sustainable profitability in the future.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 3 warning signs for Burcon NutraScience (1 shouldn't be ignored!) that you should be aware of before investing here.
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.
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.
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