Shareholders May Be A Bit More Conservative With Omni-Lite Industries Canada Inc.'s (CVE:OML) CEO Compensation For Now

The underwhelming share price performance of Omni-Lite Industries Canada Inc. (CVE:OML) in the past three years would have disappointed many shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. The AGM coming up on the 07 December 2022 could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

Our analysis indicates that OML is potentially overvalued!

Comparing Omni-Lite Industries Canada Inc.'s CEO Compensation With The Industry

According to our data, Omni-Lite Industries Canada Inc. has a market capitalization of CA$11m, and paid its CEO total annual compensation worth US$250k over the year to December 2021. Notably, that's an increase of 8.5% over the year before. It is worth noting that the CEO compensation consists entirely of the salary, worth US$250k.

For comparison, other companies in the industry with market capitalizations below CA$271m, reported a median total CEO compensation of US$268k. This suggests that Omni-Lite Industries Canada remunerates its CEO largely in line with the industry average. Moreover, Dave Robbins also holds CA$453k worth of Omni-Lite Industries Canada stock directly under their own name.

Component	2021	2020	Proportion (2021)
Salary	US$250k	US$230k	100%
Other	-	-	-
Total Compensation	US$250k	US$230k	100%

On an industry level, around 59% of total compensation represents salary and 41% is other remuneration. At the company level, Omni-Lite Industries Canada pays Dave Robbins solely through a salary, preferring to go down a conventional route. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Omni-Lite Industries Canada Inc.'s Growth Numbers

Omni-Lite Industries Canada Inc. has seen its earnings per share (EPS) increase by 65% a year over the past three years. It achieved revenue growth of 80% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Omni-Lite Industries Canada Inc. Been A Good Investment?

With a three year total loss of 18% for the shareholders, Omni-Lite Industries Canada Inc. would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Omni-Lite Industries Canada pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. Shareholders would probably be keen to find out what are the other factors could be weighing down the stock. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 3 warning signs for Omni-Lite Industries Canada (2 are potentially serious!) that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.