Shareholders May Not Be So Generous With Geodrill Limited's (TSE:GEO) CEO Compensation And Here's Why

In the past three years, the share price of Geodrill Limited (TSE:GEO) has struggled to generate growth for its shareholders. Despite positive EPS growth in the past few years, the share price hasn't tracked the fundamental performance of the company. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 12 May 2021. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

Check out our latest analysis for Geodrill

How Does Total Compensation For Dave Harper Compare With Other Companies In The Industry?

According to our data, Geodrill Limited has a market capitalization of CA$82m, and paid its CEO total annual compensation worth US$1.4m over the year to December 2020. This means that the compensation hasn't changed much from last year. We think total compensation is more important but our data shows that the CEO salary is lower, at US$475k.

On comparing similar-sized companies in the industry with market capitalizations below CA$245m, we found that the median total CEO compensation was US$120k. Hence, we can conclude that Dave Harper is remunerated higher than the industry median. Furthermore, Dave Harper directly owns CA$33m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2020	2019	Proportion (2020)
Salary	US$475k	US$425k	34%
Other	US$914k	US$931k	66%
Total Compensation	US$1.4m	US$1.4m	100%

Speaking on an industry level, nearly 95% of total compensation represents salary, while the remainder of 5% is other remuneration. Geodrill sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at Geodrill Limited's Growth Numbers

Geodrill Limited has seen its earnings per share (EPS) increase by 18% a year over the past three years. In the last year, its revenue is down 5.6%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Geodrill Limited Been A Good Investment?

Given the total shareholder loss of 7.6% over three years, many shareholders in Geodrill Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. 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 probably be keen to find out what are the other factors could be weighing down the stock. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 2 warning signs for Geodrill that you should be aware of before investing.

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. 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.
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