Kenneth Shields has been the CEO of Conifex Timber Inc. (TSE:CFF) since 2010. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we'll look at a snap shot of the business growth. 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.
How Does Kenneth Shields's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Conifex Timber Inc. has a market cap of CA$65m, and is paying total annual CEO compensation of CA$1.4m. (This is based on the year to December 2017). While we always look at total compensation first, we note that the salary component is less, at CA$450k. We looked at a group of companies with market capitalizations under CA$268m, and the median CEO total compensation was CA$141k.
Thus we can conclude that Kenneth Shields receives more in total compensation than the median of a group of companies in the same market, and of similar size to Conifex Timber Inc.. However, this doesn't necessarily mean the pay is too high. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Conifex Timber has changed over time.
Is Conifex Timber Inc. Growing?
Conifex Timber Inc. has reduced its earnings per share by an average of 26% a year, over the last three years (measured with a line of best fit). Its revenue is up 43% over last year.
The reduction in earnings per share, over three years, is arguably concerning. But in contrast the revenue growth is strong, suggesting future potential for earnings growth. 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 Conifex Timber Inc. Been A Good Investment?
With a three year total loss of 47%, Conifex Timber Inc. would certainly have some dissatisfied shareholders. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
We compared total CEO remuneration at Conifex Timber Inc. with the amount paid at companies with a similar market capitalization. We found that it pays well over the median amount paid in the benchmark group.
Over the last three years, shareholder returns have been downright disappointing, and the underlying business has failed to impress us. Although we'd stop short of calling it inappropriate, we think the CEO compensation is probably more on the generous side of things. Shareholders may want to check for free if Conifex Timber insiders are buying or selling shares.
Important note: Conifex Timber 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.
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