We Think Shareholders May Want To Consider A Review Of Aurora Spine Corporation's (CVE:ASG) CEO Compensation Package

Key Insights

• Aurora Spine's Annual General Meeting to take place on 26th of June
• Total pay for CEO Trent Northcutt includes US$136.4k salary
• The overall pay is comparable to the industry average
• Aurora Spine's EPS declined by 9.9% over the past three years while total shareholder loss over the past three years was 57%

The results at Aurora Spine Corporation (CVE:ASG) have been quite disappointing recently and CEO Trent Northcutt 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 26th of June. 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.

Check out our latest analysis for Aurora Spine

Comparing Aurora Spine Corporation's CEO Compensation With The Industry

According to our data, Aurora Spine Corporation has a market capitalization of CA$22m, and paid its CEO total annual compensation worth US$175k over the year to December 2023. We note that's an increase of 43% above last year. We note that the salary portion, which stands at US$136.4k constitutes the majority of total compensation received by the CEO.

For comparison, other companies in the Canada Medical Equipment industry with market capitalizations below CA$274m, reported a median total CEO compensation of US$216k. This suggests that Aurora Spine remunerates its CEO largely in line with the industry average. Moreover, Trent Northcutt also holds CA$1.5m worth of Aurora Spine stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	US$136k	US$106k	78%
Other	US$39k	US$17k	22%
Total Compensation	US$175k	US$123k	100%

Speaking on an industry level, nearly 86% of total compensation represents salary, while the remainder of 14% is other remuneration. Aurora Spine is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. 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 Aurora Spine Corporation's Growth Numbers

Over the last three years, Aurora Spine Corporation has shrunk its earnings per share by 9.9% per year. It achieved revenue growth of 9.1% over the last year.

Few shareholders would be pleased to read that EPS have declined. The fairly low revenue growth fails to impress given that the EPS is down. 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 Aurora Spine Corporation Been A Good Investment?

The return of -57% over three years would not have pleased Aurora Spine Corporation shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

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, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 6 warning signs for Aurora Spine you should be aware of, and 2 of them don't sit too well with us.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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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.

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