Shareholders May Be More Conservative With Scully Royalty Ltd.'s (NYSE:SRL) CEO Compensation For Now
Key Insights
Scully Royalty to hold its Annual General Meeting on 29th of December
CEO Sam Morrow's total compensation includes salary of CA$363.1k
The total compensation is 168% higher than the average for the industry
Scully Royalty's EPS declined by 93% over the past three years while total shareholder return over the past three years was 58%
Despite strong share price growth of 58% for Scully Royalty Ltd. (NYSE:SRL) over the last few years, earnings growth has been disappointing, which suggests something is amiss. These concerns will be at the front of shareholders' minds as they go into the AGM coming up on 29th of December. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.
View our latest analysis for Scully Royalty
How Does Total Compensation For Sam Morrow Compare With Other Companies In The Industry?
According to our data, Scully Royalty Ltd. has a market capitalization of US$88m, and paid its CEO total annual compensation worth CA$1.1m over the year to December 2022. We note that's a decrease of 21% compared to last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CA$363k.
In comparison with other companies in the American Metals and Mining industry with market capitalizations under US$200m, the reported median total CEO compensation was CA$414k. Hence, we can conclude that Sam Morrow is remunerated higher than the industry median. Furthermore, Sam Morrow directly owns US$59k worth of shares in the company.
Component | 2022 | 2021 | Proportion (2022) |
Salary | CA$363k | CA$458k | 33% |
Other | CA$746k | CA$949k | 67% |
Total Compensation | CA$1.1m | CA$1.4m | 100% |
On an industry level, roughly 27% of total compensation represents salary and 73% is other remuneration. Scully Royalty pays out 33% of remuneration in the form of a salary, significantly higher than the industry average. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
Scully Royalty Ltd.'s Growth
Over the last three years, Scully Royalty Ltd. has shrunk its earnings per share by 93% per year. Its revenue is down 11% over the previous year.
Few shareholders would be pleased to read that EPS have declined. And the impression is worse when you consider revenue is down year-on-year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Has Scully Royalty Ltd. Been A Good Investment?
We think that the total shareholder return of 58%, over three years, would leave most Scully Royalty Ltd. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
In Summary...
Despite the strong returns on shareholders' investments, the fact that earnings have failed to grow makes us skeptical about the stock keeping up its current momentum. The upcoming AGM will provide shareholders the opportunity to revisit the company’s remuneration policies and evaluate if the board’s judgement and decision-making is aligned with that of the company’s shareholders.
CEO pay is simply one of the many factors that need to be considered while examining business performance. We identified 4 warning signs for Scully Royalty (1 can't be ignored!) that you should be aware of before investing here.
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.
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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.
