Increases to Jade Power Trust's (CVE:JPWR.UN) CEO Compensation Might Cool off for now

In the past three years, the share price of Jade Power Trust (CVE:JPWR.UN) has struggled to generate growth for its shareholders. What is concerning is that despite positive EPS growth, the share price has not tracked the trend in fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 29 June 2021. They could also try to influence management and firm direction through voting on resolutions such as executive remuneration and other company matters. Here's our take on why we think shareholders may want to be cautious of approving a raise for the CEO at the moment.

View our latest analysis for Jade Power Trust

Comparing Jade Power Trust's CEO Compensation With the industry

At the time of writing, our data shows that Jade Power Trust has a market capitalization of CA$46m, and reported total annual CEO compensation of CA$531k for the year to December 2020. That's a notable increase of 17% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CA$258k.

In comparison with other companies in the industry with market capitalizations under CA$247m, the reported median total CEO compensation was CA$216k. Accordingly, our analysis reveals that Jade Power Trust pays J. Eadie north of the industry median.

Component	2020	2019	Proportion (2020)
Salary	CA$258k	CA$241k	49%
Other	CA$273k	CA$213k	51%
Total Compensation	CA$531k	CA$453k	100%

On an industry level, around 57% of total compensation represents salary and 43% is other remuneration. In Jade Power Trust's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

Jade Power Trust's Growth

Jade Power Trust has seen its earnings per share (EPS) increase by 118% a year over the past three years. In the last year, its revenue changed by just 0.4%.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see modest revenue growth, suggesting the underlying business is healthy. 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 Jade Power Trust Been A Good Investment?

Since shareholders would have lost about 2.4% over three years, some Jade Power Trust investors would surely be feeling negative emotions. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. Shareholders would be keen to know what's holding the stock back when earnings have grown. These concerns should be addressed at the upcoming AGM, where shareholders can question the board and evaluate if their judgement and decision making is still in line with their expectations.

While CEO pay is an important factor to be aware of, there are other areas that investors should be mindful of as well. That's why we did some digging and identified 3 warning signs for Jade Power Trust that you should be aware of before investing.

Switching gears from Jade Power Trust, 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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