Stock Analysis

How Is Thermal Energy International's (CVE:TMG) CEO Paid Relative To Peers?

TSXV:TMG
Source: Shutterstock

This article will reflect on the compensation paid to Bill Crossland who has served as CEO of Thermal Energy International Inc. (CVE:TMG) since 2009. This analysis will also assess whether Thermal Energy International pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

View our latest analysis for Thermal Energy International

Comparing Thermal Energy International Inc.'s CEO Compensation With the industry

At the time of writing, our data shows that Thermal Energy International Inc. has a market capitalization of CA$32m, and reported total annual CEO compensation of CA$292k for the year to May 2020. That's a modest increase of 3.3% on the prior year. Notably, the salary which is CA$235.5k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under CA$256m, the reported median total CEO compensation was CA$306k. So it looks like Thermal Energy International compensates Bill Crossland in line with the median for the industry. Moreover, Bill Crossland also holds CA$1.1m worth of Thermal Energy International stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20202019Proportion (2020)
Salary CA$236k CA$240k 81%
Other CA$57k CA$43k 19%
Total CompensationCA$292k CA$283k100%

On an industry level, around 60% of total compensation represents salary and 40% is other remuneration. Thermal Energy International pays out 81% of remuneration in the form of a salary, significantly higher than the industry average. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

ceo-compensation
TSXV:TMG CEO Compensation February 8th 2021

A Look at Thermal Energy International Inc.'s Growth Numbers

Over the last three years, Thermal Energy International Inc. has shrunk its earnings per share by 83% per year. In the last year, its revenue is down 25%.

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. 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 Thermal Energy International Inc. Been A Good Investment?

Boasting a total shareholder return of 135% over three years, Thermal Energy International Inc. has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

In Summary...

As we touched on above, Thermal Energy International Inc. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. This doesn't look good when you see that EPS growth over the last three years has been negative. On the flip side, shareholder returns have been strong over the same time, which is certainly a positive sign. We're not saying CEO compensation is too generous, but shareholders will probably want to see an increase in EPS before agreeing the business should pay any more.

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 Thermal Energy International (1 shouldn't be ignored!) that you should be aware of before investing here.

Switching gears from Thermal Energy International, 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.

If you’re looking to trade Thermal Energy International, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted


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

Find out whether Thermal Energy International 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.

View the Free Analysis

This article by Simply Wall St is general in nature. 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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020


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