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This article will reflect on the compensation paid to Bill Crossland who has served as CEO of Thermal Energy International Inc. (CVE:TMG) since 2009. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
How Does Total Compensation For Bill Crossland Compare With Other Companies In The Industry?
Our data indicates that Thermal Energy International Inc. has a market capitalization of CA$34m, and total annual CEO compensation was reported as CA$292k for the year to May 2020. That's a modest increase of 3.3% on the prior year. We note that the salary portion, which stands at CA$235.5k constitutes the majority of total compensation received by the CEO.
For comparison, other companies in the industry with market capitalizations below CA$250m, reported a median total CEO compensation of CA$313k. This suggests that Thermal Energy International remunerates its CEO largely in line with the industry average. Moreover, Bill Crossland also holds CA$1.3m worth of Thermal Energy International stock directly under their own name, which reveals to us that they have a significant personal stake in the company.
Talking in terms of the industry, salary represented approximately 60% of total compensation out of all the companies we analyzed, while other remuneration made up 40% of the pie. According to our research, Thermal Energy International has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.
Thermal Energy International Inc.'s Growth
Thermal Energy International Inc. has reduced its earnings per share by 83% a year over the last three years. It saw its revenue drop 25% over the last year.
Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Thermal Energy International Inc. Been A Good Investment?
Most shareholders would probably be pleased with Thermal Energy International Inc. for providing a total return of 141% over three years. 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.
As we noted earlier, Thermal Energy International pays its CEO in line with similar-sized companies belonging to the same industry. This isn't great when you look at it against the backdrop of EPS growth, which has been negative for the past three years. On the flip side, shareholder returns have been strong over the same time, which is certainly a positive sign. We do not think CEO compensation is a problem, but shareholders might think performance needs to be improved before paying any more.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 3 warning signs for Thermal Energy International (1 is a bit concerning!) that you should be aware of before investing here.
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.
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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