We Discuss Why BioNeutra Global Corporation's (CVE:BGA) CEO Compensation May Be Closely Reviewed

The results at BioNeutra Global Corporation (CVE:BGA) have been quite disappointing recently and CEO Jianhua Zhu bears some responsibility for this. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 20 September 2021. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. The data we present below explains why we think CEO compensation is not consistent with recent performance.

See our latest analysis for BioNeutra Global

Comparing BioNeutra Global Corporation's CEO Compensation With the industry

At the time of writing, our data shows that BioNeutra Global Corporation has a market capitalization of CA$8.8m, and reported total annual CEO compensation of CA$188k for the year to December 2020. That's a notable decrease of 19% on last year. We note that the salary portion, which stands at CA$170.2k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the industry with market capitalizations below CA$253m, reported a median total CEO compensation of CA$244k. This suggests that BioNeutra Global remunerates its CEO largely in line with the industry average. Furthermore, Jianhua Zhu directly owns CA$267k worth of shares in the company.

Component	2020	2019	Proportion (2020)
Salary	CA$170k	CA$188k	90%
Other	CA$18k	CA$43k	10%
Total Compensation	CA$188k	CA$231k	100%

On an industry level, around 59% of total compensation represents salary and 41% is other remuneration. According to our research, BioNeutra Global has allocated a higher percentage of pay to salary in comparison to the wider 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.

A Look at BioNeutra Global Corporation's Growth Numbers

BioNeutra Global Corporation has reduced its earnings per share by 55% a year over the last three years. It saw its revenue drop 47% over the last year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has BioNeutra Global Corporation Been A Good Investment?

With a total shareholder return of -66% over three years, BioNeutra Global Corporation shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a 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 compensation can have a massive impact on performance, but it's just one element. We've identified 5 warning signs for BioNeutra Global that investors should be aware of in a dynamic business environment.

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.

When trading stocks or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.