Glenn Watchorn has been the CEO of Terra Firma Capital Corporation (CVE:TII) since 2016. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Glenn Watchorn’s Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Terra Firma Capital Corporation has a market cap of CA$30m, and reported total annual CEO compensation of US$598k for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at US$398k. We examined a group of similar sized companies, with market capitalizations of below CA$266m. The median CEO total compensation in that group is CA$180k.
As you can see, Glenn Watchorn is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Terra Firma Capital Corporation is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business. Shareholders might be interested in this free visualization of analyst forecasts.
The graphic below shows how CEO compensation at Terra Firma Capital has changed from year to year.
Is Terra Firma Capital Corporation Growing?
Terra Firma Capital Corporation has increased its earnings per share (EPS) by an average of 29% a year, over the last three years (using a line of best fit). Its revenue is up 694% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see.
Has Terra Firma Capital Corporation Been A Good Investment?
Since shareholders would have lost about 12% over three years, some Terra Firma Capital Corporation shareholders would surely be feeling negative emotions. It therefore might be upsetting for shareholders if the CEO were paid generously.
We compared total CEO remuneration at Terra Firma Capital Corporation with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. However, the returns to investors are far less impressive, over the same period. While EPS is positive, we’d say shareholders would want better returns before the CEO is paid much more. Whatever your view on compensation, you might want to check if insiders are buying or selling Terra Firma Capital shares (free trial).
If you want to buy a stock that is better than Terra Firma Capital, this free list of high return, low debt companies is a great place to look.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned.
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