We Think Shareholders Are Less Likely To Approve A Large Pay Rise For ARHT Media Inc.'s (CVE:ART) CEO For Now

In the past three years, the share price of ARHT Media Inc. (CVE:ART) has struggled to grow and now shareholders are sitting on a loss. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. These are some of the concerns that shareholders may want to bring up at the next AGM held on 28 July 2021. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

See our latest analysis for ARHT Media

How Does Total Compensation For Larry O’Reilly Compare With Other Companies In The Industry?

According to our data, ARHT Media Inc. has a market capitalization of CA$31m, and paid its CEO total annual compensation worth CA$389k over the year to December 2020. Notably, that's an increase of 19% over the year before. In particular, the salary of CA$285.0k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the industry with market capitalizations below CA$251m, we found that the median total CEO compensation was CA$196k. This suggests that Larry O’Reilly is paid more than the median for the industry. Furthermore, Larry O’Reilly directly owns CA$808k worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2020	2019	Proportion (2020)
Salary	CA$285k	CA$285k	73%
Other	CA$104k	CA$43k	27%
Total Compensation	CA$389k	CA$328k	100%

Talking in terms of the industry, salary represented approximately 72% of total compensation out of all the companies we analyzed, while other remuneration made up 28% of the pie. Although there is a difference in how total compensation is set, ARHT Media more or less reflects the market in terms of setting the salary. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

ARHT Media Inc.'s Growth

ARHT Media Inc.'s earnings per share (EPS) grew 86% per year over the last three years. In the last year, its revenue changed by just 0.5%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has ARHT Media Inc. Been A Good Investment?

With a total shareholder return of -32% over three years, ARHT Media Inc. shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

In Summary...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 3 warning signs for ARHT Media (1 makes us a bit uncomfortable!) that you should be aware of before investing here.

Switching gears from ARHT Media, 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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