Yahoo Finance We Discuss Why Rochester Resources Ltd.'s (CVE:RCT) CEO May Deserve A Higher Pay Packet
Shareholders will be pleased by the robust performance of Rochester Resources Ltd. (CVE:RCT) recently and this will be kept in mind in the upcoming AGM on 28 January 2022. They will probably be more interested in hearing the board discuss future initiatives to further improve the business as they vote on resolutions such as executive remuneration. Here is our take on why we think CEO compensation is fair and may even warrant a raise.
View our latest analysis for Rochester Resources
Comparing Rochester Resources Ltd.'s CEO Compensation With the industry
Our data indicates that Rochester Resources Ltd. has a market capitalization of CA$1.7m, and total annual CEO compensation was reported as CA$83k for the year to May 2021. We note that's an increase of 9.7% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CA$24k.
For comparison, other companies in the industry with market capitalizations below CA$251m, reported a median total CEO compensation of CA$168k. That is to say, Nick DeMare is paid under the industry median. Moreover, Nick DeMare also holds CA$83k worth of Rochester Resources stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Component | 2021 | 2020 | Proportion (2021) |
Salary | CA$24k | CA$24k | 30% |
Other | CA$58k | CA$51k | 70% |
Total Compensation | CA$83k | CA$75k | 100% |
On an industry level, around 87% of total compensation represents salary and 13% is other remuneration. Rochester Resources pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Rochester Resources Ltd.'s Growth
Over the past three years, Rochester Resources Ltd. has seen its earnings per share (EPS) grow by 94% per year. Its revenue is up 41% 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. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Rochester Resources Ltd. Been A Good Investment?
With a total shareholder return of 13% over three years, Rochester Resources Ltd. shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.
To Conclude...
Overall, the company hasn't done too poorly performance-wise, but we would like to see some improvement. If it continues on the same road, shareholders might feel even more confident about their investment, and have little to no objections concerning CEO pay. Rather, investors would more likely want to engage on discussions related to key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 4 warning signs for Rochester Resources that investors should think about before committing capital to this stock.
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.
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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.