Wade Dawe became the CEO of Torrent Capital Ltd. (CVE:TORR) in 2016. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
How Does Wade Dawe's Compensation Compare With Similar Sized Companies?
Our data indicates that Torrent Capital Ltd. is worth CA$8.1m, and total annual CEO compensation was reported as CA$359k for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at CA$63k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We examined a group of similar sized companies, with market capitalizations of below CA$290m. The median CEO total compensation in that group is CA$225k.
Next, let's break down remuneration compositions to understand how the industry and company compare with each other. On a sector level, around 59% of total compensation represents salary and 41% is other remuneration. Non-salary compensation represents a greater slice of the remuneration pie for Torrent Capital, in sharp contrast to the overall sector.
Thus we can conclude that Wade Dawe receives more in total compensation than the median of a group of companies in the same market, and of similar size to Torrent Capital Ltd.. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business. You can see, below, how CEO compensation at Torrent Capital has changed over time.
Is Torrent Capital Ltd. Growing?
Over the last three years Torrent Capital Ltd. has grown its earnings per share (EPS) by an average of 79% per year (using a line of best fit). In the last year, its revenue is down 79%.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. Although we don't have analyst forecasts shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.
Has Torrent Capital Ltd. Been A Good Investment?
With a total shareholder return of 24% over three years, Torrent Capital 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.
We compared the total CEO remuneration paid by Torrent Capital Ltd., and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. We also note that, over the same time frame, shareholder returns haven't been bad. While it may be worth researching further, we don't see a problem with the CEO pay, given the good EPS growth. On another note, Torrent Capital has 3 warning signs (and 2 which are a bit unpleasant) we think you should know about.
If you want to buy a stock that is better than Torrent Capital, this free list of high return, low debt companies is a great place to look.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned.
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