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Ian Smith became the CEO of Clearwater Seafoods Incorporated (TSE:CLR) in 2010. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Ian Smith's Compensation Compare With Similar Sized Companies?
According to our data, Clearwater Seafoods Incorporated has a market capitalization of CA$328m, and pays its CEO total annual compensation worth CA$1.9m. (This figure is for the year to December 2018). Notably, that's an increase of 114% over the year before. While we always look at total compensation first, we note that the salary component is less, at CA$550k. We examined companies with market caps from CA$133m to CA$531m, and discovered that the median CEO total compensation of that group was CA$890k.
As you can see, Ian Smith is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Clearwater Seafoods Incorporated is paying too much. We can better assess whether the pay is overly generous by looking into the underlying business performance.
You can see, below, how CEO compensation at Clearwater Seafoods has changed over time.
Is Clearwater Seafoods Incorporated Growing?
Clearwater Seafoods Incorporated has reduced its earnings per share by an average of 66% a year, over the last three years (measured with a line of best fit). It saw its revenue drop -3.4% over the last year.
Unfortunately, earnings per share have trended lower over the last three years. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. You might want to check this free visual report on analyst forecasts for future earnings.
Has Clearwater Seafoods Incorporated Been A Good Investment?
With a three year total loss of 61%, Clearwater Seafoods Incorporated would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.
We examined the amount Clearwater Seafoods Incorporated pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.
Over the same period, investors would have come away with nothing in the way of share price gains. Notably, the CEO remuneration is actually up on last year. Some might well form the view that the CEO is paid too generously! So you may want to check if insiders are buying Clearwater Seafoods shares with their own money (free access).
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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Thank you for reading.