Here's Why We Think Freehold Royalties Ltd.'s (TSE:FRU) CEO Compensation Looks Fair

Key Insights

• Freehold Royalties will host its Annual General Meeting on 14th of May
• CEO David Spyker's total compensation includes salary of CA$260.2k
• The overall pay is 58% below the industry average
• Freehold Royalties' three-year loss to shareholders was 0.007% while its EPS grew by 20% over the past three years

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Shareholders may be wondering what CEO David Spyker plans to do to improve the less than great performance at Freehold Royalties Ltd. (TSE:FRU) recently. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 14th of May. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. We think CEO compensation looks appropriate given the data we have put together.

See our latest analysis for Freehold Royalties

How Does Total Compensation For David Spyker Compare With Other Companies In The Industry?

At the time of writing, our data shows that Freehold Royalties Ltd. has a market capitalization of CA$1.8b, and reported total annual CEO compensation of CA$1.4m for the year to December 2024. That's a notable increase of 8.3% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CA$260k.

In comparison with other companies in the Canadian Oil and Gas industry with market capitalizations ranging from CA$1.4b to CA$4.4b, the reported median CEO total compensation was CA$3.4m. In other words, Freehold Royalties pays its CEO lower than the industry median. Moreover, David Spyker also holds CA$2.3m worth of Freehold Royalties 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 47% of total compensation out of all the companies we analyzed, while other remuneration made up 53% of the pie. Freehold Royalties pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

A Look at Freehold Royalties Ltd.'s Growth Numbers

Over the past three years, Freehold Royalties Ltd. has seen its earnings per share (EPS) grow by 20% per year. Its revenue is down 1.6% over the previous year.

This demonstrates that the company has been improving recently and is good news for the shareholders. While it would be good to see revenue growth, profits matter more in the end. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Freehold Royalties Ltd. Been A Good Investment?

With a three year total loss of 0.007% for the shareholders, Freehold Royalties Ltd. would certainly have some dissatisfied shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

The lacklustre share price returns is rather divergent to the robust growth in EPS, suggesting that there may be other factors weighing on it apart from fundamentals. The upcoming AGM will provide shareholders the opportunity to raise their concerns and evaluate if the board’s judgement and decision-making is aligned with their expectations.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 2 warning signs for Freehold Royalties that investors should think about before committing capital to this stock.

Switching gears from Freehold Royalties, 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. 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.