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How Does Exchange Income's (TSE:EIF) CEO Salary Compare to Peers?

Simply Wall St

Mike Pyle has been the CEO of Exchange Income Corporation (TSE:EIF) since 2006, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Exchange Income

How Does Total Compensation For Mike Pyle Compare With Other Companies In The Industry?

According to our data, Exchange Income Corporation has a market capitalization of CA$1.2b, and paid its CEO total annual compensation worth CA$2.2m over the year to December 2019. That is, the compensation was roughly the same as last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at CA$746k.

On examining similar-sized companies in the industry with market capitalizations between CA$527m and CA$2.1b, we discovered that the median CEO total compensation of that group was CA$2.2m. From this we gather that Mike Pyle is paid around the median for CEOs in the industry. What's more, Mike Pyle holds CA$596k worth of shares in the company in their own name.

Component

2019

2018

Proportion (2019)

Salary

CA$746k

CA$727k

34%

Other

CA$1.4m

CA$1.4m

66%

Total Compensation

CA$2.2m

CA$2.1m

100%

Talking in terms of the industry, salary represented approximately 15% of total compensation out of all the companies we analyzed, while other remuneration made up 85% of the pie. Exchange Income pays out 34% of remuneration in the form of a salary, significantly higher than the industry average. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
ceo-compensation

Exchange Income Corporation's Growth

Over the last three years, Exchange Income Corporation has shrunk its earnings per share by 12% per year. It achieved revenue growth of 1.7% over the last year.

Few shareholders would be pleased to read that EPS have declined. The fairly low revenue growth fails to impress given that the EPS is down. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Exchange Income Corporation Been A Good Investment?

Exchange Income Corporation has served shareholders reasonably well, with a total return of 21% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

As we touched on above, Exchange Income Corporation is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. According to our analysis, Exchange Income is suffering from uninspiring EPS growth, and even though shareholder returns are stable, they are hardly impressive. This doesn't compare well with CEO compensation, which is largely in line with the industry median. We wouldn't go as far as saying CEO compensation is inappropriate, but we don't think the executive is underpaid.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We did our research and identified 3 warning signs (and 2 which make us uncomfortable) in Exchange Income we think you should know about.

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

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.