U.S. Markets closed

Is AcuityAds Holdings Inc.'s (CVE:AT) CEO Salary Justified?

Simply Wall St

Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!

In 2009 Tal Hayek was appointed CEO of AcuityAds Holdings Inc. (CVE:AT). This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. Next, we'll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for AcuityAds Holdings

How Does Tal Hayek's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that AcuityAds Holdings Inc. has a market cap of CA$68m, and is paying total annual CEO compensation of CA$334k. (This is based on the year to December 2018). That's a modest increase of 5.0% on the prior year year. We think total compensation is more important but we note that the CEO salary is lower, at CA$180k. We examined a group of similar sized companies, with market capitalizations of below CA$266m. The median CEO total compensation in that group is CA$150k.

Thus we can conclude that Tal Hayek receives more in total compensation than the median of a group of companies in the same market, and of similar size to AcuityAds Holdings Inc.. However, this doesn't necessarily mean the pay is too high. 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 AcuityAds Holdings has changed over time.

TSXV:AT CEO Compensation, June 13th 2019

Is AcuityAds Holdings Inc. Growing?

Over the last three years AcuityAds Holdings Inc. has shrunk its earnings per share by an average of 48% per year (measured with a line of best fit). In the last year, its revenue is up 64%.

As investors, we are a bit wary of companies that have lower earnings per share, over three years. On the other hand, the strong revenue growth suggests the business is growing. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. You might want to check this free visual report on analyst forecasts for future earnings.

Has AcuityAds Holdings Inc. Been A Good Investment?

AcuityAds Holdings Inc. has not done too badly by shareholders, with a total return of 8.3%, over three years. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

In Summary...

We compared the total CEO remuneration paid by AcuityAds Holdings Inc., and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

Over the last three years returns to investors have been uninspiring, and we would have liked to see stronger business growth. In conclusion we think the company should definitely focus on improving the business before awarding any large pay rises. Shareholders may want to check for free if AcuityAds Holdings insiders are buying or selling shares.

Important note: AcuityAds Holdings may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.