It's Probably Less Likely That Doman Building Materials Group Ltd.'s (TSE:DBM) CEO Will See A Huge Pay Rise This Year

Key Insights

• Doman Building Materials Group to hold its Annual General Meeting on 9th of May
• Salary of CA$950.0k is part of CEO Amar Doman's total remuneration
• The total compensation is similar to the average for the industry
• Over the past three years, Doman Building Materials Group's EPS grew by 4.4% and over the past three years, the total loss to shareholders 0.3%

In the past three years, the share price of Doman Building Materials Group Ltd. (TSE:DBM) has struggled to generate growth for its shareholders. 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 9th of May. 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.

See our latest analysis for Doman Building Materials Group

How Does Total Compensation For Amar Doman Compare With Other Companies In The Industry?

Our data indicates that Doman Building Materials Group Ltd. has a market capitalization of CA$671m, and total annual CEO compensation was reported as CA$2.2m for the year to December 2023. This was the same amount the CEO received in the prior year. We think total compensation is more important but our data shows that the CEO salary is lower, at CA$950k.

On examining similar-sized companies in the Canadian Trade Distributors industry with market capitalizations between CA$274m and CA$1.1b, we discovered that the median CEO total compensation of that group was CA$2.5m. So it looks like Doman Building Materials Group compensates Amar Doman in line with the median for the industry. Moreover, Amar Doman also holds CA$846k worth of Doman Building Materials Group stock directly under their own name.

Component	2023	2022	Proportion (2023)
Salary	CA$950k	CA$900k	43%
Other	CA$1.3m	CA$1.3m	57%
Total Compensation	CA$2.2m	CA$2.2m	100%

Talking in terms of the industry, salary represented approximately 29% of total compensation out of all the companies we analyzed, while other remuneration made up 71% of the pie. Doman Building Materials Group pays out 43% of remuneration in the form of a salary, significantly higher than the industry average. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Doman Building Materials Group Ltd.'s Growth Numbers

Doman Building Materials Group Ltd. has seen its earnings per share (EPS) increase by 4.4% a year over the past three years. It saw its revenue drop 18% over the last year.

We would argue that the lack of revenue growth in the last year is less than ideal, but it is good to see a modest EPS growth at least. It's hard to reach a conclusion about business performance right now. This may be one to watch. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Doman Building Materials Group Ltd. Been A Good Investment?

Given the total shareholder loss of 0.3% over three years, many shareholders in Doman Building Materials Group Ltd. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

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 did our research and spotted 2 warning signs for Doman Building Materials Group that investors should look into moving forward.

Switching gears from Doman Building Materials Group, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.