Why We Think The CEO Of Supremex Inc. (TSE:SXP) May Soon See A Pay Rise

Key Insights

• Supremex will host its Annual General Meeting on 9th of May
• Total pay for CEO Stewart Emerson includes CA$504.7k salary
• The total compensation is 34% less than the average for the industry
• Supremex's EPS grew by 36% over the past three years while total shareholder return over the past three years was 102%

The impressive results at Supremex Inc. (TSE:SXP) recently will be great news for shareholders. At the upcoming AGM on 9th of May, they would be interested to hear about the company strategy going forward and get a chance to cast their votes on resolutions such as executive remuneration and other company matters. Here we will show why we think CEO compensation is appropriate and discuss the case for a pay rise.

Check out our latest analysis for Supremex

Comparing Supremex Inc.'s CEO Compensation With The Industry

At the time of writing, our data shows that Supremex Inc. has a market capitalization of CA$102m, and reported total annual CEO compensation of CA$929k for the year to December 2023. Notably, that's a decrease of 35% over the year before. Notably, the salary which is CA$504.7k, represents a considerable chunk of the total compensation being paid.

On comparing similar-sized companies in the Canadian Forestry industry with market capitalizations below CA$274m, we found that the median total CEO compensation was CA$1.4m. In other words, Supremex pays its CEO lower than the industry median. Furthermore, Stewart Emerson directly owns CA$853k worth of shares in the company.

Component	2023	2022	Proportion (2023)
Salary	CA$505k	CA$485k	54%
Other	CA$424k	CA$947k	46%
Total Compensation	CA$929k	CA$1.4m	100%

Talking in terms of the industry, salary represented approximately 38% of total compensation out of all the companies we analyzed, while other remuneration made up 62% of the pie. Supremex is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

Supremex Inc.'s Growth

Supremex Inc. has seen its earnings per share (EPS) increase by 36% a year over the past three years. Its revenue is up 11% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Supremex Inc. Been A Good Investment?

We think that the total shareholder return of 102%, over three years, would leave most Supremex Inc. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

Given the company's decent performance, the CEO remuneration policy might not be shareholders' central point of focus in the AGM. Instead, investors might be more interested in discussions that would help manage their longer-term growth expectations such as company business strategies and future growth potential.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 4 warning signs for Supremex that investors should look into moving forward.

Important note: Supremex is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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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.