Shareholders Will Probably Hold Off On Increasing Inter-Rock Minerals Inc.'s (CVE:IRO) CEO Compensation For The Time Being

editorial-team@simplywallst.com (Simply Wall St)

Thu, May 23, 2024, 4:07 AM 4 min read

Inter-Rock Minerals to hold its Annual General Meeting on 30th of May
Total pay for CEO Michael Crombie includes US$309.4k salary
Total compensation is 31% above industry average
Inter-Rock Minerals' total shareholder return over the past three years was 44% while its EPS was down 4.5% over the past three years

The share price of Inter-Rock Minerals Inc. (CVE:IRO) has increased significantly over the past few years. However, the earnings growth has not kept up with the share price momentum, suggesting that some other factors may be driving the price direction. Some of these issues will occupy shareholders' minds as the AGM rolls around on 30th of May. One way that shareholders can influence managerial decisions is through voting on CEO and executive remuneration packages, which studies show could impact company performance. From the data that we gathered, we think that shareholders should hold off on a raise on CEO compensation until performance starts to show some improvement.

Check out our latest analysis for Inter-Rock Minerals

How Does Total Compensation For Michael Crombie Compare With Other Companies In The Industry?

According to our data, Inter-Rock Minerals Inc. has a market capitalization of CA$14m, and paid its CEO total annual compensation worth US$383k over the year to December 2023. That's a modest increase of 7.7% on the prior year. In particular, the salary of US$309.4k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the Canadian Food industry with market capitalizations below CA$274m, we found that the median total CEO compensation was US$291k. Accordingly, our analysis reveals that Inter-Rock Minerals Inc. pays Michael Crombie north of the industry median. Moreover, Michael Crombie also holds CA$3.6m worth of Inter-Rock Minerals stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component	2023	2022	Proportion (2023)
Salary	US$309k	US$275k	81%
Other	US$73k	US$80k	19%
Total Compensation	US$383k	US$355k	100%

On an industry level, roughly 51% of total compensation represents salary and 49% is other remuneration. It's interesting to note that Inter-Rock Minerals pays out a greater portion of remuneration through salary, compared to the industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

ceo-compensation — TSXV:IRO CEO Compensation May 23rd 2024

A Look at Inter-Rock Minerals Inc.'s Growth Numbers

Over the last three years, Inter-Rock Minerals Inc. has shrunk its earnings per share by 4.5% per year. In the last year, its revenue is up 4.4%.

The decline in EPS is a bit concerning. The fairly low revenue growth fails to impress given that the EPS is down. 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 Inter-Rock Minerals Inc. Been A Good Investment?

We think that the total shareholder return of 44%, over three years, would leave most Inter-Rock Minerals Inc. shareholders smiling. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.

To Conclude...

Although shareholders would be quite happy with the returns they have earned on their initial investment, earnings have failed to grow and this could mean returns may be hard to keep up. Shareholders should make the most of the coming opportunity to question the board on key concerns they may have and revisit their investment thesis with regards to the company.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 3 warning signs (and 2 which can't be ignored) in Inter-Rock Minerals we think you should know about.

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.

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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.