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This article will reflect on the compensation paid to Ken Rotman who has served as CEO of Clairvest Group Inc. (TSE:CVG) since 2018. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Clairvest Group.
How Does Total Compensation For Ken Rotman Compare With Other Companies In The Industry?
At the time of writing, our data shows that Clairvest Group Inc. has a market capitalization of CA$766m, and reported total annual CEO compensation of CA$3.7m for the year to March 2020. That's mostly flat as compared to the prior year's compensation. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CA$330k.
On examining similar-sized companies in the industry with market capitalizations between CA$261m and CA$1.0b, we discovered that the median CEO total compensation of that group was CA$5.6m. This suggests that Ken Rotman is paid below the industry median. What's more, Ken Rotman holds CA$254m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.
Speaking on an industry level, salary and non-salary portions, both make up 50% each of the total remuneration. In Clairvest Group's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.
A Look at Clairvest Group Inc.'s Growth Numbers
Over the past three years, Clairvest Group Inc. has seen its earnings per share (EPS) grow by 40% per year. Its revenue is up 25% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Clairvest Group Inc. Been A Good Investment?
Most shareholders would probably be pleased with Clairvest Group Inc. for providing a total return of 52% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.
As previously discussed, Ken is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. Since EPS growth is heading in a positive direction; many would agree with our assessment that the pay is modest. And given most shareholders are probably very happy with recent shareholder returns, they might even think Ken deserves a raise!
CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Clairvest Group that you should be aware of before investing.
Important note: Clairvest Group is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.
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. 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.
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