Our View On Becker Milk's (TSE:BEK.B) CEO Pay

The CEO of The Becker Milk Company Limited (TSE:BEK.B) is Geoffrey W. Pottow, and this article examines 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 Becker Milk.

See our latest analysis for Becker Milk

Comparing The Becker Milk Company Limited's CEO Compensation With the industry

At the time of writing, our data shows that The Becker Milk Company Limited has a market capitalization of CA$22m, and reported total annual CEO compensation of CA$215k for the year to April 2020. That is, the compensation was roughly the same as last year. We note that the salary portion, which stands at CA$200.0k constitutes the majority of total compensation received by the CEO.

In comparison with other companies in the industry with market capitalizations under CA$260m, the reported median total CEO compensation was CA$300k. So it looks like Becker Milk compensates Geoffrey W. Pottow in line with the median for the industry.

On an industry level, roughly 46% of total compensation represents salary and 54% is other remuneration. According to our research, Becker Milk has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

The Becker Milk Company Limited's Growth

The Becker Milk Company Limited has reduced its earnings per share by 31% a year over the last three years. It saw its revenue drop 2.0% over the last year.

Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has The Becker Milk Company Limited Been A Good Investment?

The Becker Milk Company Limited has generated a total shareholder return of 5.1% over three years, so most shareholders wouldn't be too disappointed. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

As we noted earlier, Becker Milk pays its CEO in line with similar-sized companies belonging to the same industry. According to our analysis, Becker Milk 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. Considering all of this, we can't say the CEO is underpaid, and moving forward shareholders will likely want to see higher growth to justify any raise.

CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 5 warning signs for Becker Milk (of which 1 is concerning!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Becker Milk, 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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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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