Shareholders will probably not be too impressed with the underwhelming results at Berry Corporation (NASDAQ:BRY) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 19 May 2021. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. The data we present below explains why we think CEO compensation is not consistent with recent performance.
Comparing Berry Corporation's CEO Compensation With the industry
According to our data, Berry Corporation has a market capitalization of US$495m, and paid its CEO total annual compensation worth US$9.6m over the year to December 2020. Notably, that's an increase of 80% over the year before. We think total compensation is more important but our data shows that the CEO salary is lower, at US$650k.
In comparison with other companies in the industry with market capitalizations ranging from US$200m to US$800m, the reported median CEO total compensation was US$1.4m. Hence, we can conclude that Trem Smith is remunerated higher than the industry median. Furthermore, Trem Smith directly owns US$2.4m worth of shares in the company, implying that they are deeply invested in the company's success.
On an industry level, around 20% of total compensation represents salary and 80% is other remuneration. Berry pays a modest slice of remuneration through salary, as compared to the broader industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.
Berry Corporation's Growth
Over the last three years, Berry Corporation has shrunk its earnings per share by 25% per year. In the last year, its revenue is down 27%.
Overall this is not a very positive result for shareholders. And the impression is worse when you consider revenue is down year-on-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 Berry Corporation Been A Good Investment?
With a total shareholder return of -41% over three years, Berry Corporation shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.
Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. 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 did our research and spotted 2 warning signs for Berry that investors should look into moving forward.
Switching gears from Berry, 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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