Here's Why BlackBerry Limited's (TSE:BB) CEO May Not Expect A Pay Rise This Year

Performance at BlackBerry Limited (TSE:BB) has not been particularly rosy recently and shareholders will likely be holding CEO John Chen and the board accountable for this. There is an opportunity for shareholders to influence management to turn the performance around by voting on resolutions such as executive remuneration at the AGM coming up on 23 June 2021. From our analysis below, we think CEO compensation looks appropriate for now.

Check out our latest analysis for BlackBerry

Comparing BlackBerry Limited's CEO Compensation With the industry

According to our data, BlackBerry Limited has a market capitalization of CA$9.6b, and paid its CEO total annual compensation worth US$3.0m over the year to February 2021. This means that the compensation hasn't changed much from last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.0m.

In comparison with other companies in the industry with market capitalizations ranging from CA$4.9b to CA$15b, the reported median CEO total compensation was US$6.2m. This suggests that John Chen is paid below the industry median. Furthermore, John Chen directly owns CA$114m worth of shares in the company, implying that they are deeply invested in the company's success.

On an industry level, around 71% of total compensation represents salary and 29% is other remuneration. BlackBerry sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

A Look at BlackBerry Limited's Growth Numbers

Over the last three years, BlackBerry Limited has shrunk its earnings per share by 93% per year. Its revenue is down 14% over the previous year.

Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has BlackBerry Limited Been A Good Investment?

Given the total shareholder loss of 0.5% over three years, many shareholders in BlackBerry Limited are probably rather dissatisfied, to say the least. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

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, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

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. We've identified 1 warning sign for BlackBerry that investors should be aware of in a dynamic business environment.

Switching gears from BlackBerry, 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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