The CEO Of Rochester Resources Ltd. (CVE:RCT) Might See A Pay Rise On The Horizon

By
Simply Wall St
Published
January 22, 2022
TSXV:RCT
Source: Shutterstock

The decent performance at Rochester Resources Ltd. (CVE:RCT) recently will please most shareholders as they go into the AGM coming up on 28 January 2022. The focus will probably be on the future strategic initiatives that the board and management will put in place to improve the business rather than executive remuneration when they cast their votes on company resolutions. In our analysis below, we discuss why we think the CEO compensation looks acceptable and the case for a raise.

See our latest analysis for Rochester Resources

How Does Total Compensation For Nick DeMare Compare With Other Companies In The Industry?

According to our data, Rochester Resources Ltd. has a market capitalization of CA$1.7m, and paid its CEO total annual compensation worth CA$83k over the year to May 2021. We note that's an increase of 9.7% above last year. We think total compensation is more important but our data shows that the CEO salary is lower, at CA$24k.

In comparison with other companies in the industry with market capitalizations under CA$251m, the reported median total CEO compensation was CA$168k. That is to say, Nick DeMare is paid under the industry median. What's more, Nick DeMare holds CA$83k worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20212020Proportion (2021)
Salary CA$24k CA$24k 30%
Other CA$58k CA$51k 70%
Total CompensationCA$83k CA$75k100%

Speaking on an industry level, nearly 87% of total compensation represents salary, while the remainder of 13% is other remuneration. Rochester Resources 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.

ceo-compensation
TSXV:RCT CEO Compensation January 22nd 2022

Rochester Resources Ltd.'s Growth

Rochester Resources Ltd.'s earnings per share (EPS) grew 94% per year over the last three years. It achieved revenue growth of 41% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. Most shareholders would be pleased to see strong revenue growth combined with EPS growth. This combo suggests a fast growing business. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Rochester Resources Ltd. Been A Good Investment?

With a total shareholder return of 13% over three years, Rochester Resources Ltd. shareholders would, in general, be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.

To Conclude...

While the company seems to be headed in the right direction performance-wise, there's always room for improvement. Assuming the business continues to grow at a good clip, few shareholders would raise any objections to the CEO's remuneration. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We did our research and spotted 4 warning signs for Rochester Resources that investors should look into moving forward.

Switching gears from Rochester Resources, 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.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.