Here's Why It's Unlikely That Andrew Peller Limited's (TSE:ADW.A) CEO Will See A Pay Rise This Year

By
Simply Wall St
Published
September 01, 2021
TSX:ADW.A
Source: Shutterstock

Andrew Peller Limited (TSE:ADW.A) has not performed well recently and CEO John Peller will probably need to up their game. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 08 September 2021. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. We present the case why we think CEO compensation is out of sync with company performance.

See our latest analysis for Andrew Peller

How Does Total Compensation For John Peller Compare With Other Companies In The Industry?

Our data indicates that Andrew Peller Limited has a market capitalization of CA$393m, and total annual CEO compensation was reported as CA$1.9m for the year to March 2021. Notably, that's an increase of 14% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CA$683k.

For comparison, other companies in the same industry with market capitalizations ranging between CA$252m and CA$1.0b had a median total CEO compensation of CA$479k. Hence, we can conclude that John Peller is remunerated higher than the industry median. Moreover, John Peller also holds CA$47m worth of Andrew Peller stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20212020Proportion (2021)
Salary CA$683k CA$683k 37%
Other CA$1.2m CA$952k 63%
Total CompensationCA$1.9m CA$1.6m100%

On an industry level, around 45% of total compensation represents salary and 55% is other remuneration. In Andrew Peller's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
TSX:ADW.A CEO Compensation September 2nd 2021

A Look at Andrew Peller Limited's Growth Numbers

Over the last three years, Andrew Peller Limited has shrunk its earnings per share by 12% per year. The trailing twelve months of revenue was pretty much the same as the prior period.

Few shareholders would be pleased to read that EPS have declined. And the flat revenue is seriously uninspiring. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Andrew Peller Limited Been A Good Investment?

The return of -45% over three years would not have pleased Andrew Peller Limited shareholders. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. That's why we did some digging and identified 1 warning sign for Andrew Peller that investors should think about before committing capital to this 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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