Here's Why Some Shareholders May Not Be Too Generous With Recipe Unlimited Corporation's (TSE:RECP) CEO Compensation This Year

Performance at Recipe Unlimited Corporation (TSE:RECP) has not been particularly rosy recently and shareholders will likely be holding CEO Frank Hennessey and the board accountable for this. There is an opportunity for shareholders to influence management to turn the performance around by voting on resolutions such as executive remuneration at the AGM coming up on 07 May 2021. From our analysis below, we think CEO compensation looks appropriate for now.

View our latest analysis for Recipe Unlimited

How Does Total Compensation For Frank Hennessey Compare With Other Companies In The Industry?

At the time of writing, our data shows that Recipe Unlimited Corporation has a market capitalization of CA$1.1b, and reported total annual CEO compensation of CA$805k for the year to December 2020. That's a notable decrease of 13% on last year. In particular, the salary of CA$484.6k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations ranging from CA$493m to CA$2.0b, the reported median CEO total compensation was CA$2.8m. This suggests that Frank Hennessey is paid below the industry median.

Component	2020	2019	Proportion (2020)
Salary	CA$485k	CA$600k	60%
Other	CA$320k	CA$320k	40%
Total Compensation	CA$805k	CA$920k	100%

Speaking on an industry level, nearly 63% of total compensation represents salary, while the remainder of 37% is other remuneration. Our data reveals that Recipe Unlimited allocates salary more or less in line with the wider market. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Recipe Unlimited Corporation's Growth

Over the last three years, Recipe Unlimited Corporation has shrunk its earnings per share by 90% per year. It saw its revenue drop 31% over the last year.

Overall this is not a very positive result for shareholders. 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. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Recipe Unlimited Corporation Been A Good Investment?

Since shareholders would have lost about 27% over three years, some Recipe Unlimited Corporation investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

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 compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 1 warning sign for Recipe Unlimited that you should be aware of before investing.

Important note: Recipe Unlimited is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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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