Yahoo Finance We Take A Look At Whether Freehold Royalties Ltd.'s (TSE:FRU) CEO May Be Underpaid
Key Insights
Freehold Royalties to hold its Annual General Meeting on 7th of May
CEO David Spyker's total compensation includes salary of CA$240.8k
The total compensation is 61% less than the average for the industry
Freehold Royalties' EPS grew by 57% over the past three years while total shareholder return over the past three years was 105%
The impressive results at Freehold Royalties Ltd. (TSE:FRU) recently will be great news for shareholders. At the upcoming AGM on 7th of May, they will get a chance to hear the board review the company results, discuss future strategy and cast their vote on any resolutions such as executive remuneration. We think the CEO has done a pretty decent job and probably deserves a well-earned pay rise.
See our latest analysis for Freehold Royalties
Comparing Freehold Royalties Ltd.'s CEO Compensation With The Industry
At the time of writing, our data shows that Freehold Royalties Ltd. has a market capitalization of CA$2.1b, and reported total annual CEO compensation of CA$1.3m for the year to December 2023. We note that's an increase of 23% above last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CA$241k.
On examining similar-sized companies in the Canadian Oil and Gas industry with market capitalizations between CA$1.4b and CA$4.4b, we discovered that the median CEO total compensation of that group was CA$3.3m. In other words, Freehold Royalties pays its CEO lower than the industry median. What's more, David Spyker holds CA$2.3m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Component | 2023 | 2022 | Proportion (2023) |
Salary | CA$241k | CA$218k | 18% |
Other | CA$1.1m | CA$849k | 82% |
Total Compensation | CA$1.3m | CA$1.1m | 100% |
On an industry level, around 37% of total compensation represents salary and 63% is other remuneration. It's interesting to note that Freehold Royalties allocates a smaller portion of compensation to salary in comparison to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Freehold Royalties Ltd.'s Growth
Freehold Royalties Ltd.'s earnings per share (EPS) grew 57% per year over the last three years. In the last year, its revenue is down 20%.
This demonstrates that the company has been improving recently and is good news for the shareholders. The lack of revenue growth isn't ideal, but it is the bottom line that counts most in business. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Freehold Royalties Ltd. Been A Good Investment?
Boasting a total shareholder return of 105% over three years, Freehold Royalties Ltd. has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
In Summary...
Seeing that the company has put in a relatively good performance, the CEO remuneration policy may not be the focus at the AGM. In fact, strategic decisions that could impact the future of the business might be a far more interesting topic for investors as it would help them set their longer-term expectations.
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Freehold Royalties that you should be aware of before investing.
Important note: Freehold Royalties is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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.
