We Think ADENTRA Inc.'s (TSE:ADEN) CEO Compensation Package Needs To Be Put Under A Microscope

Key Insights

• ADENTRA to hold its Annual General Meeting on 6th of May
• CEO Rob Brown's total compensation includes salary of US$673.3k
• The total compensation is 116% higher than the average for the industry
• Over the past three years, ADENTRA's EPS fell by 27% and over the past three years, the total loss to shareholders 12%

We've discovered 2 warning signs about ADENTRA. View them for free.

Shareholders will probably not be too impressed with the underwhelming results at ADENTRA Inc. (TSE:ADEN) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 6th of May. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for ADENTRA

Comparing ADENTRA Inc.'s CEO Compensation With The Industry

Our data indicates that ADENTRA Inc. has a market capitalization of CA$681m, and total annual CEO compensation was reported as US$3.3m for the year to December 2024. That's a notable increase of 8.9% on last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$673k.

For comparison, other companies in the Canadian Trade Distributors industry with market capitalizations ranging between CA$277m and CA$1.1b had a median total CEO compensation of US$1.5m. Hence, we can conclude that Rob Brown is remunerated higher than the industry median. What's more, Rob Brown holds CA$8.5m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2024	2023	Proportion (2024)
Salary	US$673k	US$731k	20%
Other	US$2.6m	US$2.3m	80%
Total Compensation	US$3.3m	US$3.0m	100%

On an industry level, roughly 32% of total compensation represents salary and 68% is other remuneration. In ADENTRA's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ADENTRA Inc.'s Growth

Over the last three years, ADENTRA Inc. has shrunk its earnings per share by 27% per year. In the last year, its revenue is down 2.5%.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 ADENTRA Inc. Been A Good Investment?

With a three year total loss of 12% for the shareholders, ADENTRA Inc. would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. In our study, we found 2 warning signs for ADENTRA you should be aware of, and 1 of them makes us a bit uncomfortable.

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.