Stock Analysis

What We Learned About TerraVest Industries' (TSE:TVK) CEO Compensation

  •  Updated
TSX:TVK
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Dustin Haw has been the CEO of TerraVest Industries Inc. (TSE:TVK) since 2017, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether TerraVest Industries pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

Check out our latest analysis for TerraVest Industries

Comparing TerraVest Industries Inc.'s CEO Compensation With the industry

According to our data, TerraVest Industries Inc. has a market capitalization of CA$340m, and paid its CEO total annual compensation worth CA$313k over the year to September 2020. That's just a smallish increase of 7.5% on last year. We note that the salary portion, which stands at CA$214.2k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the same industry with market capitalizations ranging between CA$126m and CA$505m had a median total CEO compensation of CA$2.3m. In other words, TerraVest Industries pays its CEO lower than the industry median. Moreover, Dustin Haw also holds CA$1.7m worth of TerraVest Industries stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20202019Proportion (2020)
Salary CA$214k CA$205k 68%
Other CA$99k CA$87k 32%
Total CompensationCA$313k CA$291k100%

On an industry level, around 38% of total compensation represents salary and 62% is other remuneration. TerraVest Industries is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

ceo-compensation
TSX:TVK CEO Compensation February 16th 2021

TerraVest Industries Inc.'s Growth

TerraVest Industries Inc. has seen its earnings per share (EPS) increase by 44% a year over the past three years. Its revenue is down 5.5% over the previous year.

This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has TerraVest Industries Inc. Been A Good Investment?

Most shareholders would probably be pleased with TerraVest Industries Inc. for providing a total return of 109% over three years. 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.

To Conclude...

As we noted earlier, TerraVest Industries pays its CEO lower than the norm for similar-sized companies belonging to the same industry. When taking into account the company's strong EPS growth over the past three years, it appears CEO compensation is modest. Given the strong history of shareholder returns, the shareholders are probably very happy with Dustin's performance.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 3 warning signs for TerraVest Industries that you should be aware of before investing.

Switching gears from TerraVest Industries, 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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