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We Think Shareholders May Want To Consider A Review Of Aurora Spine Corporation's (CVE:ASG) CEO Compensation Package

Key Insights

  • Aurora Spine to hold its Annual General Meeting on 26th of June

  • Total pay for CEO Trent Northcutt includes US$136.4k salary

  • The overall pay is comparable to the industry average

  • Over the past three years, Aurora Spine's EPS fell by 9.9% and over the past three years, the total loss to shareholders 57%

Aurora Spine Corporation (CVE:ASG) has not performed well recently and CEO Trent Northcutt will probably need to up their game. At the upcoming AGM on 26th of June, shareholders can hear from the board including their plans for turning around performance. 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. From our analysis, we think CEO compensation may need a review in light of the recent performance.

See our latest analysis for Aurora Spine

How Does Total Compensation For Trent Northcutt Compare With Other Companies In The Industry?

According to our data, Aurora Spine Corporation has a market capitalization of CA$22m, and paid its CEO total annual compensation worth US$175k over the year to December 2023. We note that's an increase of 43% above last year. We note that the salary portion, which stands at US$136.4k constitutes the majority of total compensation received by the CEO.

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On comparing similar-sized companies in the Canada Medical Equipment industry with market capitalizations below CA$274m, we found that the median total CEO compensation was US$216k. From this we gather that Trent Northcutt is paid around the median for CEOs in the industry. What's more, Trent Northcutt holds CA$1.5m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component

2023

2022

Proportion (2023)

Salary

US$136k

US$106k

78%

Other

US$39k

US$17k

22%

Total Compensation

US$175k

US$123k

100%

On an industry level, around 86% of total compensation represents salary and 14% is other remuneration. There isn't a significant difference between Aurora Spine and the broader market, in terms of salary allocation in the overall compensation package. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

ceo-compensation
ceo-compensation

Aurora Spine Corporation's Growth

Over the last three years, Aurora Spine Corporation has shrunk its earnings per share by 9.9% per year. Its revenue is up 9.1% over the last year.

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. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Aurora Spine Corporation Been A Good Investment?

The return of -57% over three years would not have pleased Aurora Spine Corporation shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 6 warning signs for Aurora Spine (2 make us uncomfortable!) that you should be aware of before investing here.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com