Shareholders May Be More Conservative With Highwood Asset Management Ltd.'s (CVE:HAM) CEO Compensation For Now

Key Insights

• Highwood Asset Management to hold its Annual General Meeting on 30th of May
• Total pay for CEO Greg MacDonald includes CA$208.5k salary
• The total compensation is 87% higher than the average for the industry
• Over the past three years, Highwood Asset Management's EPS grew by 88% and over the past three years, the total loss to shareholders 29%

In the past three years, the share price of Highwood Asset Management Ltd. (CVE:HAM) has struggled to grow and now shareholders are sitting on a loss. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 30th of May. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

View our latest analysis for Highwood Asset Management

Comparing Highwood Asset Management Ltd.'s CEO Compensation With The Industry

At the time of writing, our data shows that Highwood Asset Management Ltd. has a market capitalization of CA$102m, and reported total annual CEO compensation of CA$504k for the year to December 2023. Notably, that's an increase of 32% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at CA$208k.

For comparison, other companies in the Canadian Oil and Gas industry with market capitalizations below CA$275m, reported a median total CEO compensation of CA$269k. This suggests that Greg MacDonald is paid more than the median for the industry. Furthermore, Greg MacDonald directly owns CA$2.4m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2023	2022	Proportion (2023)
Salary	CA$208k	CA$195k	41%
Other	CA$295k	CA$187k	59%
Total Compensation	CA$504k	CA$382k	100%

Talking in terms of the industry, salary represented approximately 38% of total compensation out of all the companies we analyzed, while other remuneration made up 62% of the pie. There isn't a significant difference between Highwood Asset Management and the broader market, in terms of salary allocation in the overall compensation package. 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 Highwood Asset Management Ltd.'s Growth Numbers

Over the past three years, Highwood Asset Management Ltd. has seen its earnings per share (EPS) grow by 88% per year. In the last year, its revenue is up 619%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 Highwood Asset Management Ltd. Been A Good Investment?

Since shareholders would have lost about 29% over three years, some Highwood Asset Management Ltd. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

The fact that shareholders are sitting on a loss on the value of their shares in the past few years is certainly disconcerting. A huge lag in share price growth when earnings have grown may indicate there could be other issues that are affecting the company at the moment that the market is focused on. Shareholders would be keen to know what's holding the stock back when earnings have grown. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 5 warning signs for Highwood Asset Management (of which 4 are a bit concerning!) that you should know about in order to have a holistic understanding of the stock.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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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.