Most Shareholders Will Probably Find That The CEO Compensation For Terra Firma Capital Corporation (CVE:TII) Is Reasonable

CEO Glenn Watchorn has done a decent job of delivering relatively good performance at Terra Firma Capital Corporation (CVE:TII) recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 23 June 2021. Based on our analysis of the data below, we think CEO compensation seems reasonable for now.

Check out our latest analysis for Terra Firma Capital

Comparing Terra Firma Capital Corporation's CEO Compensation With the industry

According to our data, Terra Firma Capital Corporation has a market capitalization of CA$39m, and paid its CEO total annual compensation worth US$426k over the year to December 2020. That's a notable decrease of 12% on last year. Notably, the salary which is US$319.9k, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below CA$243m, reported a median total CEO compensation of US$511k. So it looks like Terra Firma Capital compensates Glenn Watchorn in line with the median for the industry. Furthermore, Glenn Watchorn directly owns CA$983k worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2020	2019	Proportion (2020)
Salary	US$320k	US$310k	75%
Other	US$106k	US$176k	25%
Total Compensation	US$426k	US$486k	100%

On an industry level, roughly 34% of total compensation represents salary and 66% is other remuneration. It's interesting to note that Terra Firma Capital pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Terra Firma Capital Corporation's Growth

Terra Firma Capital Corporation has seen its earnings per share (EPS) increase by 51% a year over the past three years. In the last year, its revenue is down 21%.

Shareholders would be glad to know that the company has improved itself over the last few years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Terra Firma Capital Corporation Been A Good Investment?

With a total shareholder return of 15% over three years, Terra Firma Capital Corporation shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

In Summary...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, we still think that any proposed increase in CEO compensation will be examined closely to make sure the compensation is appropriate and linked to performance.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 3 warning signs for Terra Firma Capital that investors should be aware of in a dynamic business environment.

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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