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Shareholders Will Probably Be Cautious Of Increasing Recipe Unlimited Corporation's (TSE:RECP) CEO Compensation At The Moment

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The underwhelming performance at Recipe Unlimited Corporation (TSE:RECP) recently has probably not pleased shareholders. At the upcoming AGM on 07 May 2021, shareholders may have the opportunity to influence management to turn the performance around by voting on resolutions such as executive remuneration and other matters. We think most shareholders will probably pass the CEO compensation, based on what we gathered.

View our latest analysis for Recipe Unlimited

Comparing Recipe Unlimited Corporation's CEO Compensation With the industry

Our data indicates that Recipe Unlimited Corporation has a market capitalization of CA$1.1b, and total annual CEO compensation was reported as CA$805k for the year to December 2020. Notably, that's a decrease of 13% over the year before. We note that the salary portion, which stands at CA$484.6k constitutes the majority of total compensation received by the CEO.

On examining similar-sized companies in the industry with market capitalizations between CA$493m and CA$2.0b, we discovered that the median CEO total compensation of that group was CA$2.8m. That is to say, Frank Hennessey is paid under the industry median.

Component

2020

2019

Proportion (2020)

Salary

CA$485k

CA$600k

60%

Other

CA$320k

CA$320k

40%

Total Compensation

CA$805k

CA$920k

100%

On an industry level, around 63% of total compensation represents salary and 37% is other remuneration. Recipe Unlimited is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

ceo-compensation
ceo-compensation

Recipe Unlimited Corporation's Growth

Recipe Unlimited Corporation has reduced its earnings per share by 90% a year over the last three years. It saw its revenue drop 31% over the last 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. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Recipe Unlimited Corporation Been A Good Investment?

Since shareholders would have lost about 27% over three years, some Recipe Unlimited Corporation investors would surely be feeling negative emotions. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

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. That's why we did some digging and identified 1 warning sign for Recipe Unlimited that you should be aware of before investing.

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.

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. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.