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How Does Alkaline Water's (NASDAQ:WTER) CEO Pay Compare With Company Performance?

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Simply Wall St
·4-min read
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This article will reflect on the compensation paid to Richard Wright who has served as CEO of The Alkaline Water Company Inc. (NASDAQ:WTER) since 2017. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

View our latest analysis for Alkaline Water

How Does Total Compensation For Richard Wright Compare With Other Companies In The Industry?

At the time of writing, our data shows that The Alkaline Water Company Inc. has a market capitalization of US$101m, and reported total annual CEO compensation of US$191k for the year to March 2020. That is, the compensation was roughly the same as last year. In particular, the salary of US$168.0k, makes up a huge portion of the total compensation being paid to the CEO.

In comparison with other companies in the industry with market capitalizations under US$200m, the reported median total CEO compensation was US$218k. From this we gather that Richard Wright is paid around the median for CEOs in the industry. What's more, Richard Wright holds US$4.8m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component

2020

2019

Proportion (2020)

Salary

US$168k

US$168k

88%

Other

US$23k

US$25k

12%

Total Compensation

US$191k

US$193k

100%

Speaking on an industry level, nearly 18% of total compensation represents salary, while the remainder of 82% is other remuneration. Alkaline Water pays out 88% of remuneration in the form of a salary, significantly higher than the industry average. 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

A Look at The Alkaline Water Company Inc.'s Growth Numbers

Earnings per share at The Alkaline Water Company Inc. are much the same as they were three years ago, albeit with slightly higher. It achieved revenue growth of 27% over the last year.

We like the look of the strong year-on-year improvement in revenue. With that in mind, the modestly improving EPS seems positive. We'd stop short of saying the business performance is amazing, but there are enough positives to justify further research, or even adding the stock to your watch-list. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has The Alkaline Water Company Inc. Been A Good Investment?

The Alkaline Water Company Inc. has served shareholders reasonably well, with a total return of 30% over three years. 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.

In Summary...

As previously discussed, Richard is compensated close to the median for companies of its size, and which belong to the same industry. But the company has failed to produce substantial growth in either EPS or total shareholder return. We'd say that Richard is remunerated reasonably, but shareholders might be looking for better returns before they agree Richard deserves a raise.

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 4 warning signs (and 2 which are potentially serious) in Alkaline Water we think you should know about.

Switching gears from Alkaline Water, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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.