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Increases to H2O Innovation Inc.'s (CVE:HEO) CEO Compensation Might Cool off for now

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CEO Frederic Dugre has done a decent job of delivering relatively good performance at H2O Innovation Inc. (CVE:HEO) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 09 December 2021. However, some shareholders may still want to keep CEO compensation within reason.

See our latest analysis for H2O Innovation

Comparing H2O Innovation Inc.'s CEO Compensation With the industry

Our data indicates that H2O Innovation Inc. has a market capitalization of CA$223m, and total annual CEO compensation was reported as CA$1.2m for the year to June 2021. We note that's an increase of 99% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CA$330k.

On examining similar-sized companies in the industry with market capitalizations between CA$128m and CA$510m, we discovered that the median CEO total compensation of that group was CA$416k. Accordingly, our analysis reveals that H2O Innovation Inc. pays Frederic Dugre north of the industry median. Moreover, Frederic Dugre also holds CA$1.9m worth of H2O Innovation 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$330k

CA$330k

28%

Other

CA$836k

CA$255k

72%

Total Compensation

CA$1.2m

CA$585k

100%

Talking in terms of the industry, salary represented approximately 74% of total compensation out of all the companies we analyzed, while other remuneration made up 26% of the pie. H2O Innovation pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
ceo-compensation

A Look at H2O Innovation Inc.'s Growth Numbers

H2O Innovation Inc.'s earnings per share (EPS) grew 71% per year over the last three years. It achieved revenue growth of 5.2% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's nice to see revenue heading northwards, as this is consistent with healthy business conditions. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has H2O Innovation Inc. Been A Good Investment?

Boasting a total shareholder return of 130% over three years, H2O Innovation Inc. has done well by shareholders. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. Still, not all shareholders might be in favor of a pay raise to the CEO, seeing that they are already being paid higher than the industry.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 1 warning sign for H2O Innovation that investors should look into moving forward.

Important note: H2O Innovation 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.

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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.

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