This Is Why Shareholders May Want To Hold Back On A Pay Rise For BevCanna Enterprises Inc.'s (CSE:BEV) CEO

Key Insights

• BevCanna Enterprises will host its Annual General Meeting on 29th of December
• Salary of CA$305.0k is part of CEO Marcello Leone's total remuneration
• The total compensation is 34% less than the average for the industry
• BevCanna Enterprises' three-year loss to shareholders was 99% while its EPS was down 5.5% over the past three years

The underwhelming performance at BevCanna Enterprises Inc. (CSE:BEV) recently has probably not pleased shareholders. At the upcoming AGM on 29th of December, shareholders may have the opportunity to influence management to turn the performance around by voting on resolutions such as executive remuneration and other matters. The data we gathered below shows that CEO compensation looks acceptable for now.

Check out our latest analysis for BevCanna Enterprises

How Does Total Compensation For Marcello Leone Compare With Other Companies In The Industry?

According to our data, BevCanna Enterprises Inc. has a market capitalization of CA$319k, and paid its CEO total annual compensation worth CA$358k over the year to December 2022. That's a notable increase of 17% on last year. In particular, the salary of CA$305.0k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the Canadian Beverage industry with market capitalizations below CA$266m, we found that the median total CEO compensation was CA$543k. In other words, BevCanna Enterprises pays its CEO lower than the industry median. Moreover, Marcello Leone also holds CA$223k worth of BevCanna Enterprises stock directly under their own name.

Component	2022	2021	Proportion (2022)
Salary	CA$305k	CA$305k	85%
Other	CA$53k	-	15%
Total Compensation	CA$358k	CA$305k	100%

On an industry level, roughly 43% of total compensation represents salary and 57% is other remuneration. BevCanna Enterprises pays out 85% of remuneration in the form of a salary, significantly higher than the industry average. 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.

BevCanna Enterprises Inc.'s Growth

Over the last three years, BevCanna Enterprises Inc. has shrunk its earnings per share by 5.5% per year. Its revenue is down 49% over the previous year.

Few shareholders would be pleased to read that EPS have declined. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has BevCanna Enterprises Inc. Been A Good Investment?

The return of -99% over three years would not have pleased BevCanna Enterprises Inc. shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO 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. In our study, we found 5 warning signs for BevCanna Enterprises you should be aware of, and 3 of them are potentially serious.

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.