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It would be hard to discount the role that CEO Trent Northcutt has played in delivering the impressive results at Aurora Spine Corporation (CVE:ASG) recently. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 08 July 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.
Comparing Aurora Spine Corporation's CEO Compensation With the industry
Our data indicates that Aurora Spine Corporation has a market capitalization of CA$38m, and total annual CEO compensation was reported as US$143k for the year to December 2020. This was the same as last year. Notably, the salary which is US$131.0k, represents most of the total compensation being paid.
On comparing similar-sized companies in the industry with market capitalizations below CA$248m, we found that the median total CEO compensation was US$171k. So it looks like Aurora Spine compensates Trent Northcutt in line with the median for the industry. Moreover, Trent Northcutt also holds CA$3.9m worth of Aurora Spine stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
On an industry level, roughly 83% of total compensation represents salary and 17% is other remuneration. According to our research, Aurora Spine has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
Aurora Spine Corporation's Growth
Over the past three years, Aurora Spine Corporation has seen its earnings per share (EPS) grow by 34% per year. In the last year, its revenue is down 19%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Aurora Spine Corporation Been A Good Investment?
Boasting a total shareholder return of 347% over three years, Aurora Spine Corporation 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.
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. Seeing that earnings growth and share price performance seems to be on the right path, the more pressing focus for shareholders at the AGM may be how the board and management plans to turn the company into a sustainably profitable one.
CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Aurora Spine that you should be aware of before investing.
Important note: Aurora Spine 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. 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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