This article will reflect on the compensation paid to Scott Tannas who has served as CEO of The Western Investment Company of Canada Limited (CVE:WI) since 2015. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
See our latest analysis for Western Investment Company of Canada
Comparing The Western Investment Company of Canada Limited’s CEO Compensation With the industry
According to our data, The Western Investment Company of Canada Limited has a market capitalization of CA$7.6m, and paid its CEO total annual compensation worth CA$173k over the year to December 2019. Notably, that’s an increase of 37% over the year before. We note that the salary portion, which stands at CA$112.5k constitutes the majority of total compensation received by the CEO.
On comparing similar-sized companies in the industry with market capitalizations below CA$264m, we found that the median total CEO compensation was CA$872k. That is to say, Scott Tannas is paid under the industry median. What’s more, Scott Tannas holds CA$325k worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
| Component | 2019 | 2018 | Proportion (2019) |
| Salary | CA$113k | CA$75k | 65% |
| Other | CA$61k | CA$52k | 35% |
| Total Compensation | CA$173k | CA$127k | 100% |
Speaking on an industry level, nearly 31% of total compensation represents salary, while the remainder of 69% is other remuneration. Western Investment Company of Canada is paying a higher share of its remuneration through a salary in comparison to the overall industry. If total compensation veers towards salary, it suggests that the variable portion – which is generally tied to performance, is lower.
The Western Investment Company of Canada Limited’s Growth
Over the last three years, The Western Investment Company of Canada Limited has shrunk its earnings per share by 12% per year. It achieved revenue growth of 44% over the last year.
Investors would be a bit wary of companies that have lower EPS But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can’t form a strong opinion about business performance yet; but it’s one worth watching. 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 The Western Investment Company of Canada Limited Been A Good Investment?
Given the total shareholder loss of 61% over three years, many shareholders in The Western Investment Company of Canada Limited are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.
In Summary…
As previously discussed, Scott is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. But poor shareholder returns EPS growth have hampered the company over the past three years. On the flip side, recent revenue growth has been positive. So, although Scott is modestly paid, shareholders might want to see positive shareholder returns before warming to the idea of a raise.
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 3 warning signs (and 2 which are concerning) in Western Investment Company of Canada we think you should know about.
Important note: Western Investment Company of Canada 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. 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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