It's Unlikely That Shareholders Will Increase Delta 9 Cannabis Inc.'s (TSE:DN) Compensation By Much This Year

Key Insights

• Delta 9 Cannabis to hold its Annual General Meeting on 28th of June
• CEO John Arbuthnot's total compensation includes salary of CA$180.8k
• The total compensation is 37% less than the average for the industry
• Delta 9 Cannabis' EPS declined by 3.7% over the past three years while total shareholder loss over the past three years was 97%

The disappointing performance at Delta 9 Cannabis Inc. (TSE:DN) will make some shareholders rather disheartened. The next AGM coming up on 28th of June will be a chance for shareholders to have their concerns addressed by the board, challenge management on company strategy and vote on resolutions such as executive remuneration, which may help change the company's future prospects. The data we gathered below shows that CEO compensation looks acceptable for now.

See our latest analysis for Delta 9 Cannabis

How Does Total Compensation For John Arbuthnot Compare With Other Companies In The Industry?

At the time of writing, our data shows that Delta 9 Cannabis Inc. has a market capitalization of CA$5.0m, and reported total annual CEO compensation of CA$293k for the year to December 2023. We note that's a decrease of 19% compared to last year. In particular, the salary of CA$180.8k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the Canadian Pharmaceuticals industry with market capitalizations below CA$274m, we found that the median total CEO compensation was CA$462k. This suggests that John Arbuthnot is paid below the industry median. Furthermore, John Arbuthnot directly owns CA$182k worth of shares in the company.

Component	2023	2022	Proportion (2023)
Salary	CA$181k	CA$181k	62%
Other	CA$113k	CA$181k	38%
Total Compensation	CA$293k	CA$362k	100%

Speaking on an industry level, nearly 68% of total compensation represents salary, while the remainder of 32% is other remuneration. Our data reveals that Delta 9 Cannabis allocates salary more or less in line with the wider market. 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 Delta 9 Cannabis Inc.'s Growth Numbers

Over the last three years, Delta 9 Cannabis Inc. has shrunk its earnings per share by 3.7% per year. In the last year, its revenue is up 4.4%.

Overall this is not a very positive result for shareholders. The fairly low revenue growth fails to impress given that the EPS is down. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. 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 Delta 9 Cannabis Inc. Been A Good Investment?

With a total shareholder return of -97% over three years, Delta 9 Cannabis Inc. shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

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.

While it is important to pay attention to CEO remuneration, investors should also consider other elements of the business. We did our research and spotted 5 warning signs for Delta 9 Cannabis that investors should look into moving forward.

Important note: Delta 9 Cannabis 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.

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