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Is Acceleware Ltd. (CVE:AXE) Overpaying Its CEO?

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In 2010 Geoff Clark was appointed CEO of Acceleware Ltd. (CVE:AXE). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. Third, we’ll reflect on the total return to shareholders over three years, as a second measure of business performance. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Acceleware

How Does Geoff Clark’s Compensation Compare With Similar Sized Companies?

Our data indicates that Acceleware Ltd. is worth CA$14m, and total annual CEO compensation is CA$381k. (This number is for the twelve months until 2017). While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at CA$199k. We examined a group of similar sized companies, with market capitalizations of below CA$264m. The median CEO compensation in that group is CA$157k.

As you can see, Geoff Clark is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Acceleware Ltd. is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see, below, how CEO compensation at Acceleware has changed over time.

TSXV:AXE CEO Compensation February 7th 19
TSXV:AXE CEO Compensation February 7th 19

Is Acceleware Ltd. Growing?

On average over the last three years, Acceleware Ltd. has shrunk earnings per share by 55% each year (measured with a line of best fit). Its revenue is down -14% over last year.

Sadly for shareholders, earnings per share are actually down, over three years. And the fact that revenue is down year on year arguably paints an ugly picture. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don’t have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Acceleware Ltd. Been A Good Investment?

Most shareholders would probably be pleased with Acceleware Ltd. for providing a total return of 833% over three years. 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.

In Summary…

We compared the total CEO remuneration paid by Acceleware Ltd., and compared it to remuneration at a group of similar sized companies. Our data suggests that it pays above the median CEO pay within that group.

Neither earnings per share nor revenue have been growing sufficiently fast to impress us, over the last three years.

On the other hand, returns have been good, so the company is doing something right. Considering this, shareholders are probably not too worried about the CEO compensation. So you may want to check if insiders are buying Acceleware shares with their own money (free access).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.