We Think Shareholders May Want To Consider A Review Of Western Forest Products Inc.'s (TSE:WEF) CEO Compensation Package

Key Insights

• Western Forest Products to hold its Annual General Meeting on 7th of May
• Total pay for CEO J. Hofer includes CA$772.2k salary
• The overall pay is 121% above the industry average
• Over the past three years, Western Forest Products' EPS fell by 107% and over the past three years, the total loss to shareholders 81%

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

The results at Western Forest Products Inc. (TSE:WEF) have been quite disappointing recently and CEO J. Hofer bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 7th of May. 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.

See our latest analysis for Western Forest Products

How Does Total Compensation For J. Hofer Compare With Other Companies In The Industry?

Our data indicates that Western Forest Products Inc. has a market capitalization of CA$119m, and total annual CEO compensation was reported as CA$2.2m for the year to December 2024. We note that's an increase of 15% above last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CA$772k.

In comparison with other companies in the Canadian Forestry industry with market capitalizations under CA$277m, the reported median total CEO compensation was CA$983k. Accordingly, our analysis reveals that Western Forest Products Inc. pays J. Hofer north of the industry median. What's more, J. Hofer holds CA$249k worth of shares in the company in their own name.

Component	2024	2023	Proportion (2024)
Salary	CA$772k	CA$750k	36%
Other	CA$1.4m	CA$1.1m	64%
Total Compensation	CA$2.2m	CA$1.9m	100%

On an industry level, roughly 37% of total compensation represents salary and 63% is other remuneration. Although there is a difference in how total compensation is set, Western Forest Products more or less reflects the market in terms of setting the salary. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Western Forest Products Inc.'s Growth Numbers

Western Forest Products Inc. has reduced its earnings per share by 107% a year over the last three years. In the last year, its revenue is up 4.6%.

Few shareholders would be pleased to read that EPS have declined. The modest increase in revenue in the last year isn't enough to make us overlook the disappointing change in EPS. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. 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 Western Forest Products Inc. Been A Good Investment?

Few Western Forest Products Inc. shareholders would feel satisfied with the return of -81% over three years. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 2 warning signs for Western Forest Products (1 is concerning!) that you should be aware of before investing here.

Switching gears from Western Forest Products, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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

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.