A million bucks here and there, positive feedback from proxy-advisory services, solid shareholder support for the compensation approach in its “say on pay” vote.
However, the shares have fallen more than 97 per cent from their all-time high of $18 in October, 2007, giving it a market capitalization of less than $200-million. That return even includes an amazing 557-per-cent gain from its COVID-19 pandemic lows. To replace options, Sherritt devised a stock program that includes awards tied to how the company performs. The payouts of these performance-share units are based on two things: Sherritt’s stock returns, versus resource-industry peers; and an operational measure that considers cost savings and cash-flow generation. The company looks at results over a three-year period to calculate the final payout. Solid.
Because the plan uses relative shareholder return as a performance factor, and also pays out in shares of common stock, there can be a kind of ratcheting effect when the share price booms. A modest stock grant can explode in value. Other executives who received grants valued between $250,000 and $300,000 in 2020, some of whom also left the company, received payouts in February, 2023, of about $1.1-million.