What Did OrganiGram Holdings' (TSE:OGI) CEO Take Home Last Year?

Greg Engel became the CEO of OrganiGram Holdings Inc. (TSE:OGI) in 2017, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for OrganiGram Holdings.

Check out our latest analysis for OrganiGram Holdings

Comparing OrganiGram Holdings Inc.'s CEO Compensation With the industry

At the time of writing, our data shows that OrganiGram Holdings Inc. has a market capitalization of CA$1.1b, and reported total annual CEO compensation of CA$723k for the year to August 2020. Notably, that's a decrease of 33% over the year before. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CA$347k.

On comparing similar companies from the same industry with market caps ranging from CA$507m to CA$2.0b, we found that the median CEO total compensation was CA$924k. From this we gather that Greg Engel is paid around the median for CEOs in the industry. What's more, Greg Engel holds CA$342k worth of shares in the company in their own name.

Speaking on an industry level, nearly 89% of total compensation represents salary, while the remainder of 11% is other remuneration. It's interesting to note that OrganiGram Holdings allocates a smaller portion of compensation to salary in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

OrganiGram Holdings Inc.'s Growth

OrganiGram Holdings Inc. has reduced its earnings per share by 95% a year over the last three years. It saw its revenue drop 13% over the last year.

The decline in EPS is a bit concerning. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has OrganiGram Holdings Inc. Been A Good Investment?

OrganiGram Holdings Inc. has not done too badly by shareholders, with a total return of 5.8%, over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

To Conclude...

As we noted earlier, OrganiGram Holdings pays its CEO in line with similar-sized companies belonging to the same industry. According to our analysis, OrganiGram Holdings is suffering from uninspiring EPS growth, and even though shareholder returns are stable, they are hardly impressive. These figures do not go well against CEO compensation, which is more or less equal to the industry median. We would stop short of the compensation is inappropriate, but we can't say the executive is underpaid.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. We've identified 2 warning signs for OrganiGram Holdings that investors should be aware of in a dynamic business environment.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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This article by Simply Wall St is general in nature. 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.
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