Key Things To Understand About Vertex Resource Group's (CVE:VTX) CEO Pay Cheque

The CEO of Vertex Resource Group Ltd. (CVE:VTX) is Terry Stephenson, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for Vertex Resource Group

How Does Total Compensation For Terry Stephenson Compare With Other Companies In The Industry?

At the time of writing, our data shows that Vertex Resource Group Ltd. has a market capitalization of CA$20m, and reported total annual CEO compensation of CA$284k for the year to December 2019. We note that's a decrease of 20% compared to last year. In particular, the salary of CA$275.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below CA$255m, reported a median total CEO compensation of CA$284k. This suggests that Vertex Resource Group remunerates its CEO largely in line with the industry average. Moreover, Terry Stephenson also holds CA$3.6m worth of Vertex Resource Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Talking in terms of the industry, salary represented approximately 61% of total compensation out of all the companies we analyzed, while other remuneration made up 39% of the pie. Vertex Resource Group is focused on going down a more traditional approach and is paying a higher portion of compensation through salary, as compared to non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

A Look at Vertex Resource Group Ltd.'s Growth Numbers

Vertex Resource Group Ltd. has reduced its earnings per share by 64% a year over the last three years. Its revenue is down 20% over the previous year.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Vertex Resource Group Ltd. Been A Good Investment?

Since shareholders would have lost about 50% over three years, some Vertex Resource Group Ltd. investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.

To Conclude...

Terry receives almost all of their compensation through a salary. As we noted earlier, Vertex Resource Group pays its CEO in line with similar-sized companies belonging to the same industry. On the other hand, EPS growth and total shareholder return have been negative for the last three years. Considering overall performance, shareholders will likely hold off support for a raise until results improve.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 3 warning signs for Vertex Resource Group you should be aware of, and 1 of them makes us a bit uncomfortable.

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. 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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