How Should Investors Feel About Jewett-Cameron Trading's (NASDAQ:JCTC.F) CEO Remuneration?

This article will reflect on the compensation paid to Charlie Hopewell who has served as CEO of Jewett-Cameron Trading Company Ltd. (NASDAQ:JCTC.F) since 2017. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Jewett-Cameron Trading.

View our latest analysis for Jewett-Cameron Trading

How Does Total Compensation For Charlie Hopewell Compare With Other Companies In The Industry?

According to our data, Jewett-Cameron Trading Company Ltd. has a market capitalization of US$32m, and paid its CEO total annual compensation worth US$349k over the year to August 2020. We note that's an increase of 59% above last year. In particular, the salary of US$250.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below US$200m, reported a median total CEO compensation of US$349k. So it looks like Jewett-Cameron Trading compensates Charlie Hopewell in line with the median for the industry. What's more, Charlie Hopewell holds US$112k worth of shares in the company in their own name.

Talking in terms of the industry, salary represented approximately 19% of total compensation out of all the companies we analyzed, while other remuneration made up 81% of the pie. According to our research, Jewett-Cameron Trading has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Jewett-Cameron Trading Company Ltd.'s Growth

Jewett-Cameron Trading Company Ltd. has seen its earnings per share (EPS) increase by 8.6% a year over the past three years. Its revenue is down 1.1% over the previous year.

We would argue that the lack of revenue growth in the last year is less than ideal, but it is good to see a modest EPS growth at least. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 Jewett-Cameron Trading Company Ltd. Been A Good Investment?

With a total shareholder return of 24% over three years, Jewett-Cameron Trading Company Ltd. shareholders would, in general, be reasonably content. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

As we noted earlier, Jewett-Cameron Trading pays its CEO in line with similar-sized companies belonging to the same industry. But the company has failed to produce substantial growth in either EPS or total shareholder return. So, although the CEO compensation seems reasonable, shareholders might want to see some further progress before they agree that Charlie should get a raise.

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. That's why we did our research, and identified 2 warning signs for Jewett-Cameron Trading (of which 1 is a bit concerning!) that you should know about in order to have a holistic understanding of the stock.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

If you’re looking to trade Jewett-Cameron Trading, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.