Increases to CEO Compensation Might Be Put On Hold For Now at Crescita Therapeutics Inc. (TSE:CTX)

Performance at Crescita Therapeutics Inc. (TSE:CTX) has been reasonably good and CEO Serge Verreault has done a decent job of steering the company in the right direction. This is something shareholders will keep in mind as they cast their votes on company resolutions such as executive remuneration in the upcoming AGM on 11 May 2021. However, some shareholders may still be hesitant of being overly generous with CEO compensation.

Check out our latest analysis for Crescita Therapeutics

Comparing Crescita Therapeutics Inc.'s CEO Compensation With the industry

At the time of writing, our data shows that Crescita Therapeutics Inc. has a market capitalization of CA$18m, and reported total annual CEO compensation of CA$659k for the year to December 2020. Notably, that's a decrease of 20% over the year before. In particular, the salary of CA$337.7k, makes up a fairly large portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations under CA$246m, the reported median total CEO compensation was CA$220k. Accordingly, our analysis reveals that Crescita Therapeutics Inc. pays Serge Verreault north of the industry median. What's more, Serge Verreault holds CA$552k worth of shares in the company in their own name.

Component	2020	2019	Proportion (2020)
Salary	CA$338k	CA$336k	51%
Other	CA$321k	CA$487k	49%
Total Compensation	CA$659k	CA$823k	100%

On an industry level, roughly 70% of total compensation represents salary and 30% is other remuneration. It's interesting to note that Crescita Therapeutics allocates a smaller portion of compensation to salary in comparison to the broader industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at Crescita Therapeutics Inc.'s Growth Numbers

Crescita Therapeutics Inc. has seen its earnings per share (EPS) increase by 88% a year over the past three years. Its revenue is down 30% over the previous year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Crescita Therapeutics Inc. Been A Good Investment?

Most shareholders would probably be pleased with Crescita Therapeutics Inc. for providing a total return of 93% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

The company's decent performance might have made most shareholders happy, possibly making CEO remuneration the least of the concerns to be discussed in the upcoming AGM. However, any decision to raise CEO pay might be met with some objections from the shareholders given that the CEO is already paid higher than the industry average.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 3 warning signs for Crescita Therapeutics that you should be aware of before investing.

Switching gears from Crescita Therapeutics, 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.

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