Yahoo Finance This Is Why We Think Diversified Royalty Corp.'s (TSE:DIV) CEO Might Get A Pay Rise Approved By Shareholders
Key Insights
Diversified Royalty's Annual General Meeting to take place on 20th of June
CEO Sean Morrison's total compensation includes salary of CA$345.0k
Total compensation is 46% below industry average
Diversified Royalty's EPS grew by 51% over the past three years while total shareholder return over the past three years was 24%
The decent performance at Diversified Royalty Corp. (TSE:DIV) recently will please most shareholders as they go into the AGM coming up on 20th of June. This would also be a chance for them to hear the board review the financial results, discuss future company strategy to further improve the business and vote on any resolutions such as executive remuneration. Here is our take on why we think CEO compensation is fair and may even warrant a raise.
View our latest analysis for Diversified Royalty
Comparing Diversified Royalty Corp.'s CEO Compensation With The Industry
Our data indicates that Diversified Royalty Corp. has a market capitalization of CA$455m, and total annual CEO compensation was reported as CA$2.3m for the year to December 2023. That's a notable increase of 20% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CA$345k.
On comparing similar companies from the Canadian Specialty Retail industry with market caps ranging from CA$275m to CA$1.1b, we found that the median CEO total compensation was CA$4.2m. That is to say, Sean Morrison is paid under the industry median. Furthermore, Sean Morrison directly owns CA$5.0m worth of shares in the company, implying that they are deeply invested in the company's success.
Component | 2023 | 2022 | Proportion (2023) |
Salary | CA$345k | CA$345k | 15% |
Other | CA$1.9m | CA$1.6m | 85% |
Total Compensation | CA$2.3m | CA$1.9m | 100% |
On an industry level, around 54% of total compensation represents salary and 46% is other remuneration. Diversified Royalty pays a modest slice of remuneration through salary, as compared to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
Diversified Royalty Corp.'s Growth
Diversified Royalty Corp. has seen its earnings per share (EPS) increase by 51% a year over the past three years. In the last year, its revenue is up 24%.
Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Diversified Royalty Corp. Been A Good Investment?
Diversified Royalty Corp. has generated a total shareholder return of 24% over three years, so most shareholders would be reasonably content. But they would probably prefer not to see CEO compensation far in excess of the median.
In Summary...
While the company seems to be headed in the right direction performance-wise, there's always room for improvement. Assuming the business continues to grow at a good clip, few shareholders would raise any objections to the CEO's remuneration. Rather, investors would more likely want to engage on discussions related to key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 3 warning signs for Diversified Royalty (of which 2 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.
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.
