Shareholders of Omni-Lite Industries Canada Inc. (CVE:OML) will have been dismayed by the negative share price return over the last three years. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 07 December 2022. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.
How Does Total Compensation For Dave Robbins Compare With Other Companies In The Industry?
According to our data, Omni-Lite Industries Canada Inc. has a market capitalization of CA$11m, and paid its CEO total annual compensation worth US$250k over the year to December 2021. That's a notable increase of 8.5% on last year. It is worth noting that the CEO compensation consists entirely of the salary, worth US$250k.
For comparison, other companies in the industry with market capitalizations below CA$271m, reported a median total CEO compensation of US$268k. So it looks like Omni-Lite Industries Canada compensates Dave Robbins in line with the median for the industry. Moreover, Dave Robbins also holds CA$453k worth of Omni-Lite Industries Canada stock directly under their own name.
On an industry level, around 59% of total compensation represents salary and 41% is other remuneration. Speaking on a company level, Omni-Lite Industries Canada prefers to tread along a traditional path, disbursing all compensation through a salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
A Look at Omni-Lite Industries Canada Inc.'s Growth Numbers
Omni-Lite Industries Canada Inc. has seen its earnings per share (EPS) increase by 65% a year over the past three years. Its revenue is up 80% over the last year.
This demonstrates that the company has been improving recently and is good news for the shareholders. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Omni-Lite Industries Canada Inc. Been A Good Investment?
With a three year total loss of 18% for the shareholders, Omni-Lite Industries Canada Inc. would certainly have some dissatisfied shareholders. So shareholders would probably want the company to be less generous with CEO compensation.
Omni-Lite Industries Canada pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 3 warning signs (and 2 which can't be ignored) in Omni-Lite Industries Canada we think you should know about.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity 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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