We Think Some Shareholders May Hesitate To Increase Orbit Garant Drilling Inc.'s (TSE:OGD) CEO Compensation

Simply Wall St
November 24, 2021
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Shareholders of Orbit Garant Drilling Inc. (TSE:OGD) will have been dismayed by the negative share price return over the last three years. Per share earnings growth is also poor, despite revenues growing. Shareholders will have a chance to take their concerns to the board at the next AGM on 01 December 2021 and vote on resolutions including executive compensation, which studies show may have an impact on company performance. We think shareholders may be cautious of approving a pay rise for the CEO at the moment, based on our analysis below.

Check out our latest analysis for Orbit Garant Drilling

How Does Total Compensation For Eric Alexandre Compare With Other Companies In The Industry?

Our data indicates that Orbit Garant Drilling Inc. has a market capitalization of CA$37m, and total annual CEO compensation was reported as CA$728k for the year to June 2021. We note that's an increase of 52% above last year. In particular, the salary of CA$380.6k, makes up a fairly large portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below CA$254m, reported a median total CEO compensation of CA$170k. Accordingly, our analysis reveals that Orbit Garant Drilling Inc. pays Eric Alexandre north of the industry median. Moreover, Eric Alexandre also holds CA$1.4m worth of Orbit Garant Drilling stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20212020Proportion (2021)
Salary CA$381k CA$381k 52%
Other CA$347k CA$99k 48%
Total CompensationCA$728k CA$480k100%

On an industry level, around 86% of total compensation represents salary and 14% is other remuneration. It's interesting to note that Orbit Garant Drilling allocates a smaller portion of compensation to salary in comparison to the broader 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.

TSX:OGD CEO Compensation November 24th 2021

Orbit Garant Drilling Inc.'s Growth

Over the last three years, Orbit Garant Drilling Inc. has shrunk its earnings per share by 19% per year. Its revenue is up 37% over the last year.

Investors would be a bit wary of companies that have lower EPS On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Orbit Garant Drilling Inc. Been A Good Investment?

The return of -43% over three years would not have pleased Orbit Garant Drilling Inc. shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

The company's earnings haven't grown and possibly because of that, the stock has performed poorly, resulting in a loss for the company's shareholders. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 3 warning signs for Orbit Garant Drilling (of which 1 makes us a bit uncomfortable!) that you should know about in order to have a holistic understanding of the stock.

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.

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.

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Simply Wall St is focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of data scientists and multiple equity analysts with over two decades worth of financial markets experience between them.