Here's Why Shareholders Should Examine Route1 Inc.'s (CVE:ROI) CEO Compensation Package More Closely

Key Insights

• Route1's Annual General Meeting to take place on 29th of November
• Total pay for CEO Tony Busseri includes CA$446.8k salary
• The overall pay is 36% above the industry average
• Route1's EPS declined by 41% over the past three years while total shareholder loss over the past three years was 98%

Shareholders will probably not be too impressed with the underwhelming results at Route1 Inc. (CVE:ROI) recently. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 29th of November. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. The data we present below explains why we think CEO compensation is not consistent with recent performance.

Check out our latest analysis for Route1

How Does Total Compensation For Tony Busseri Compare With Other Companies In The Industry?

According to our data, Route1 Inc. has a market capitalization of CA$1.1m, and paid its CEO total annual compensation worth CA$447k over the year to December 2022. Notably, that's an increase of 17% over the year before. Notably, the salary of CA$447k is the entirety of the CEO compensation.

On comparing similar-sized companies in the Canadian Software industry with market capitalizations below CA$274m, we found that the median total CEO compensation was CA$329k. This suggests that Tony Busseri is paid more than the median for the industry.

Component	2022	2021	Proportion (2022)
Salary	CA$447k	CA$408k	100%
Other	-		-
Total Compensation	CA$447k	CA$383k	100%

Talking in terms of the industry, salary represented approximately 71% of total compensation out of all the companies we analyzed, while other remuneration made up 29% of the pie. On a company level, Route1 prefers to reward its CEO through a salary, opting not to pay Tony Busseri through non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Route1 Inc.'s Growth

Over the last three years, Route1 Inc. has shrunk its earnings per share by 41% per year. In the last year, its revenue is down 35%.

The decline in EPS is a bit concerning. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet 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 Route1 Inc. Been A Good Investment?

With a total shareholder return of -98% over three years, Route1 Inc. shareholders would by and large be disappointed. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Route1 pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. 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, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 4 warning signs for Route1 (3 are a bit concerning!) that you should be aware of before investing here.

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. 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.