Stock Analysis

Tornado Global Hydrovacs Ltd.'s (CVE:TGH) CEO Looks Like They Deserve Their Pay Packet

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We have been pretty impressed with the performance at Tornado Global Hydrovacs Ltd. (CVE:TGH) recently and CEO Bill Rollins deserves a mention for their role in it. The pleasing results would be something shareholders would keep in mind at the upcoming AGM on 18 November 2021. The focus will probably be on the future company strategy as shareholders cast their votes on resolutions such as executive remuneration and other matters. We think the CEO has done a pretty decent job and we discuss why the CEO compensation is appropriate.

Check out our latest analysis for Tornado Global Hydrovacs

Comparing Tornado Global Hydrovacs Ltd.'s CEO Compensation With the industry

Our data indicates that Tornado Global Hydrovacs Ltd. has a market capitalization of CA$60m, and total annual CEO compensation was reported as CA$243k for the year to December 2020. That's a notable decrease of 30% on last year. Notably, the salary which is CA$176.2k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under CA$249m, the reported median total CEO compensation was CA$240k. From this we gather that Bill Rollins is paid around the median for CEOs in the industry. What's more, Bill Rollins holds CA$524k worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20202019Proportion (2020)
Salary CA$176k CA$200k 72%
Other CA$67k CA$150k 28%
Total CompensationCA$243k CA$350k100%

Talking in terms of the industry, salary represented approximately 72% of total compensation out of all the companies we analyzed, while other remuneration made up 28% of the pie. Although there is a difference in how total compensation is set, Tornado Global Hydrovacs more or less reflects the market in terms of setting the salary. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

TSXV:TGH CEO Compensation November 11th 2021

A Look at Tornado Global Hydrovacs Ltd.'s Growth Numbers

Tornado Global Hydrovacs Ltd. has seen its earnings per share (EPS) increase by 16% a year over the past three years. In the last year, its revenue is down 25%.

This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Tornado Global Hydrovacs Ltd. Been A Good Investment?

We think that the total shareholder return of 246%, over three years, would leave most Tornado Global Hydrovacs Ltd. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Given the improved performance, shareholders may be more forgiving of CEO compensation in the upcoming AGM. However, despite the strong growth in earnings and share price growth, the focus for shareholders would be how the company plans to steer the company towards sustainable profitability in the near future.

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 3 warning signs for Tornado Global Hydrovacs (of which 1 doesn't sit too well with us!) that you should know about in order to have a holistic understanding of the stock.

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.

Valuation is complex, but we're helping make it simple.

Find out whether Tornado Global Hydrovacs is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.

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