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Is Ceres Global Ag Corp. (TSE:CRP) Excessively Paying Its CEO?

Simply Wall St

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Robert Day became the CEO of Ceres Global Ag Corp. ( TSE:CRP ) in 2016. 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 we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for Ceres Global Ag

How Does Robert Day's Compensation Compare With Similar Sized Companies?

Our data indicates that Ceres Global Ag Corp. is worth CA$115m, and total annual CEO compensation is US$543k. (This number is for the twelve months until June 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$375k. We looked at a group of companies with market capitalizations under US$200m, and the median CEO total compensation was US$113k.

It would therefore appear that Ceres Global Ag Corp. pays Robert Day more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.

The graphic below shows how CEO compensation at Ceres Global Ag has changed from year to year.

TSX:CRP CEO Compensation, June 17th 2019

Is Ceres Global Ag Corp. Growing?

On average over the last three years, Ceres Global Ag Corp. has shrunk earnings per share by 4.7% each year (measured with a line of best fit). It saw its revenue drop -7.9% over the last year.

Sadly for shareholders, earnings per share are actually down, over three years. And the impression is worse when you consider revenue is down year-on-year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Although we don't have analyst forecasts, you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Ceres Global Ag Corp. Been A Good Investment?

Given the total loss of 25% over three years, many shareholders in Ceres Global Ag Corp. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

We examined the amount Ceres Global Ag Corp. 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.

We think many shareholders would be underwhelmed with the business growth over the last three years.

Arguably worse, investors are without a positive return for the last three years. In our opinion the CEO might be paid too generously! Whatever your view on compensation, you might want to check if insiders are buying or selling Ceres Global Ag shares (free trial).

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 editorial-team@simplywallst.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.