Shareholders Will Likely Find Advent-AWI Holdings Inc.'s (CVE:AWI) CEO Compensation Acceptable

The performance at Advent-AWI Holdings Inc. (CVE:AWI) has been rather lacklustre of late and shareholders may be wondering what CEO Alice Chiu is planning to do about this. One way they can exercise their influence on management is through voting on resolutions, such as executive remuneration at the next AGM, coming up on 10 December 2021. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. In our opinion, CEO compensation does not look excessive and we discuss why.

See our latest analysis for Advent-AWI Holdings

How Does Total Compensation For Alice Chiu Compare With Other Companies In The Industry?

Our data indicates that Advent-AWI Holdings Inc. has a market capitalization of CA$12m, and total annual CEO compensation was reported as CA$230k for the year to December 2020. That's mostly flat as compared to the prior year's compensation. Notably, the salary which is CA$160.0k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under CA$256m, the reported median total CEO compensation was CA$377k. In other words, Advent-AWI Holdings pays its CEO lower than the industry median. What's more, Alice Chiu holds CA$3.2m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2020	2019	Proportion (2020)
Salary	CA$160k	CA$160k	70%
Other	CA$70k	CA$74k	30%
Total Compensation	CA$230k	CA$234k	100%

On an industry level, roughly 40% of total compensation represents salary and 60% is other remuneration. It's interesting to note that Advent-AWI Holdings pays out a greater portion of remuneration through salary, compared to the industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Advent-AWI Holdings Inc.'s Growth

Over the last three years, Advent-AWI Holdings Inc. has shrunk its earnings per share by 62% per year. In the last year, its revenue is up 7.6%.

The decline in EPS is a bit concerning. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Advent-AWI Holdings Inc. Been A Good Investment?

Most shareholders would probably be pleased with Advent-AWI Holdings Inc. for providing a total return of 35% over three years. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean these strong returns may not continue. Shareholders might want to question the board about these concerns, and revisit their investment thesis for the company.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 4 warning signs for Advent-AWI Holdings (of which 2 are significant!) that you should know about in order to have a holistic understanding of the stock.

Switching gears from Advent-AWI Holdings, 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. 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.