We Think The Compensation For Drone Delivery Canada Corp.'s (CVE:FLT) CEO Looks About Right

Key Insights

• Drone Delivery Canada's Annual General Meeting to take place on 19th of August
• CEO Steve Magirias' total compensation includes salary of CA$341.3k
• The overall pay is 43% below the industry average
• Drone Delivery Canada's three-year loss to shareholders was 86% while its EPS grew by 19% over the past three years

Shareholders may be wondering what CEO Steve Magirias plans to do to improve the less than great performance at Drone Delivery Canada Corp. (CVE:FLT) recently. At the next AGM coming up on 19th of August, they can influence managerial decision making through voting on resolutions, including executive remuneration. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. We have prepared some analysis below to show that CEO compensation looks to be reasonable.

Check out our latest analysis for Drone Delivery Canada

How Does Total Compensation For Steve Magirias Compare With Other Companies In The Industry?

Our data indicates that Drone Delivery Canada Corp. has a market capitalization of CA$41m, and total annual CEO compensation was reported as CA$371k for the year to December 2023. We note that's an increase of 21% above last year. We note that the salary portion, which stands at CA$341.3k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Canadian Aerospace & Defense industry with market capitalizations below CA$275m, reported a median total CEO compensation of CA$654k. Accordingly, Drone Delivery Canada pays its CEO under the industry median.

Component	2023	2022	Proportion (2023)
Salary	CA$341k	CA$274k	92%
Other	CA$30k	CA$33k	8%
Total Compensation	CA$371k	CA$307k	100%

Speaking on an industry level, nearly 40% of total compensation represents salary, while the remainder of 60% is other remuneration. Drone Delivery Canada pays out 92% of remuneration in the form of a salary, significantly higher than the industry average. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

Drone Delivery Canada Corp.'s Growth

Over the past three years, Drone Delivery Canada Corp. has seen its earnings per share (EPS) grow by 19% per year. It saw its revenue drop 39% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's always a tough situation when revenues are not growing, but ultimately profits are more important. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Drone Delivery Canada Corp. Been A Good Investment?

With a total shareholder return of -86% over three years, Drone Delivery Canada Corp. shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

The fact that shareholders are sitting on a loss is certainly disheartening. This contrasts to the strong EPS growth recently however, and suggests that there may be other factors at play driving down the share price. A key focus for the board and management will be how to align the share price with fundamentals. The upcoming AGM will provide shareholders the opportunity to raise their concerns and evaluate if the board’s judgement and decision-making is aligned with their expectations.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 4 warning signs for Drone Delivery Canada (of which 2 are concerning!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Drone Delivery Canada, 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.

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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.