Should Shareholders Reconsider Freshii Inc.'s (TSE:FRII) CEO Compensation Package?

Shareholders will probably not be too impressed with the underwhelming results at Freshii Inc. (TSE:FRII) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 27 April 2021. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. From our analysis, we think CEO compensation may need a review in light of the recent performance.

View our latest analysis for Freshii

Comparing Freshii Inc.'s CEO Compensation With the industry

Our data indicates that Freshii Inc. has a market capitalization of CA$68m, and total annual CEO compensation was reported as US$1.7m for the year to December 2020. Notably, that's an increase of 15% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$381k.

In comparison with other companies in the industry with market capitalizations under CA$252m, the reported median total CEO compensation was US$306k. This suggests that Matthew Corrin is paid more than the median for the industry.

Talking in terms of the industry, salary represented approximately 63% of total compensation out of all the companies we analyzed, while other remuneration made up 37% of the pie. It's interesting to note that Freshii allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Freshii Inc.'s Growth Numbers

Over the last three years, Freshii Inc. has shrunk its earnings per share by 55% per year. In the last year, its revenue is down 38%.

Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Freshii Inc. Been A Good Investment?

Few Freshii Inc. shareholders would feel satisfied with the return of -69% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 2 warning signs (and 1 which is potentially serious) in Freshii we think you should know about.

Switching gears from Freshii, 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. 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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