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Orogen Royalties Inc. (CVE:OGN) has not performed well recently and CEO Paddy Nicol will probably need to up their game. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 25 October 2021. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.
Comparing Orogen Royalties Inc.'s CEO Compensation With the industry
According to our data, Orogen Royalties Inc. has a market capitalization of CA$61m, and paid its CEO total annual compensation worth CA$268k over the year to December 2020. We note that's a decrease of 8.3% compared to last year. In particular, the salary of CA$231.0k, 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 CA$247m, the reported median total CEO compensation was CA$162k. This suggests that Paddy Nicol is paid more than the median for the industry. Moreover, Paddy Nicol also holds CA$516k worth of Orogen Royalties stock directly under their own name.
Talking in terms of the industry, salary represented approximately 85% of total compensation out of all the companies we analyzed, while other remuneration made up 15% of the pie. There isn't a significant difference between Orogen Royalties and the broader market, in terms of salary allocation in the overall compensation package. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.
A Look at Orogen Royalties Inc.'s Growth Numbers
Over the last three years, Orogen Royalties Inc. has shrunk its earnings per share by 93% per year. It saw its revenue drop 85% over the last year.
Overall this is not a very positive result for shareholders. 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. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Orogen Royalties Inc. Been A Good Investment?
With a total shareholder return of -75% over three years, Orogen Royalties Inc. shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.
Along with the business performing poorly, shareholders have suffered with poor share price returns on their investments, suggesting that there's little to no chance of them being in favor of a CEO pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.
We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. That's why we did our research, and identified 4 warning signs for Orogen Royalties (of which 2 can't be ignored!) that you should know about in order to have a holistic understanding of the stock.
Important note: Orogen Royalties is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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.
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