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Route1 Inc. (CVE:ROI) has not performed well recently and CEO Tony Busseri will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 07 December 2021. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. From our analysis, we think CEO compensation may need a review in light of the recent performance.
How Does Total Compensation For Tony Busseri Compare With Other Companies In The Industry?
Our data indicates that Route1 Inc. has a market capitalization of CA$14m, and total annual CEO compensation was reported as CA$458k for the year to December 2020. We note that's an increase of 12% above last year. In particular, the salary of CA$383.4k, makes up a huge portion of the total compensation being paid to the CEO.
For comparison, other companies in the industry with market capitalizations below CA$256m, reported a median total CEO compensation of CA$202k. Hence, we can conclude that Tony Busseri is remunerated higher than the industry median. What's more, Tony Busseri holds CA$223k worth of shares in the company in their own name.
On an industry level, around 85% of total compensation represents salary and 15% is other remuneration. There isn't a significant difference between Route1 and the broader market, in terms of salary allocation in the overall compensation package. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at Route1 Inc.'s Growth Numbers
Over the last three years, Route1 Inc. has shrunk its earnings per share by 11% per year. It saw its revenue drop 11% 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. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Route1 Inc. Been A Good Investment?
The return of -34% over three years would not have pleased Route1 Inc. shareholders. So shareholders would probably want the company to be less generous with CEO compensation.
Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 5 warning signs for Route1 (of which 2 are a bit unpleasant!) that you should know about in order to have a holistic understanding of the stock.
Important note: Route1 is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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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