Yahoo Finance Reco International Group Inc.'s (CVE:RGI) CEO Will Probably Find It Hard To See A Huge Raise This Year
Key Insights
Reco International Group's Annual General Meeting to take place on 30th of April
Total pay for CEO Hugh Zhen includes CA$162.0k salary
Total compensation is similar to the industry average
Reco International Group's EPS declined by 20% over the past three years while total shareholder loss over the past three years was 91%
The underwhelming share price performance of Reco International Group Inc. (CVE:RGI) in the past three years would have disappointed many shareholders. Per share earnings growth is also poor, despite revenues growing. The AGM coming up on 30th of April will be an opportunity for shareholders to have their concerns addressed by the board and for them to exercise their influence on management through voting on resolutions such as executive remuneration. Here's our take on why we think shareholders might be hesitant about approving a raise at the moment.
See our latest analysis for Reco International Group
Comparing Reco International Group Inc.'s CEO Compensation With The Industry
At the time of writing, our data shows that Reco International Group Inc. has a market capitalization of CA$496k, and reported total annual CEO compensation of CA$162k for the year to September 2023. Notably, that's an increase of 54% over the year before. It is worth noting that the CEO compensation consists entirely of the salary, worth CA$162k.
On comparing similar-sized companies in the Canadian Construction industry with market capitalizations below CA$274m, we found that the median total CEO compensation was CA$210k. From this we gather that Hugh Zhen is paid around the median for CEOs in the industry.
Component | 2023 | 2022 | Proportion (2023) |
Salary | CA$162k | CA$105k | 100% |
Other | - | - | - |
Total Compensation | CA$162k | CA$105k | 100% |
Speaking on an industry level, nearly 17% of total compensation represents salary, while the remainder of 83% is other remuneration. At the company level, Reco International Group pays Hugh Zhen solely through a salary, preferring to go down a conventional route. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
Reco International Group Inc.'s Growth
Over the last three years, Reco International Group Inc. has shrunk its earnings per share by 20% per year. Its revenue is up 56% over the last year.
The reduction in EPS, over three years, is arguably concerning. On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 Reco International Group Inc. Been A Good Investment?
With a total shareholder return of -91% over three years, Reco International Group Inc. shareholders would by and large be disappointed. This suggests it would be unwise for the company to pay the CEO too generously.
In Summary...
Reco International Group rewards its CEO solely through a salary, ignoring non-salary benefits completely. The loss to shareholders over the past three years is certainly concerning and possibly has something to do with the fact that the company's earnings haven't grown. In the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan is in line with their expectations.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 5 warning signs (and 4 which are a bit unpleasant) in Reco International Group we think you should know about.
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.
