Is Black Diamond Group Limited's (TSE:BDI) CEO Pay Fair?
In 2009 Trevor Haynes was appointed CEO of Black Diamond Group Limited (TSE:BDI). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for Black Diamond Group
How Does Trevor Haynes's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Black Diamond Group Limited has a market cap of CA$100m, and reported total annual CEO compensation of CA$1.1m for the year to December 2018. We think total compensation is more important but we note that the CEO salary is lower, at CA$663k. 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$160k.
Thus we can conclude that Trevor Haynes receives more in total compensation than the median of a group of companies in the same market, and of similar size to Black Diamond Group Limited. However, this doesn't necessarily mean the pay is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.
The graphic below shows how CEO compensation at Black Diamond Group has changed from year to year.
Is Black Diamond Group Limited Growing?
Black Diamond Group Limited has increased its earnings per share (EPS) by an average of 13% a year, over the last three years (using a line of best fit). Its revenue is up 8.2% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's good to see a bit of revenue growth, as this suggests the business is able to grow sustainably. It could be important to check this free visual depiction of what analysts expect for the future.
Has Black Diamond Group Limited Been A Good Investment?
Since shareholders would have lost about 58% over three years, some Black Diamond Group Limited shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
We compared total CEO remuneration at Black Diamond Group Limited with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
However we must not forget that the EPS growth has been very strong over three years. However, the returns to investors are far less impressive, over the same period. While EPS is positive, we'd say shareholders would want better returns before the CEO is paid much more. Whatever your view on compensation, you might want to check if insiders are buying or selling Black Diamond Group shares (free trial).
If you want to buy a stock that is better than Black Diamond Group, this free list of high return, low debt companies is a great place to look.
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.
