Does Reko International Group Inc.'s (CVE:REKO) CEO Pay Reflect Performance?
In 2007 Diane Reko was appointed CEO of Reko International Group Inc. (CVE:REKO). This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
See our latest analysis for Reko International Group
How Does Diane Reko's Compensation Compare With Similar Sized Companies?
Our data indicates that Reko International Group Inc. is worth CA$16m, and total annual CEO compensation was reported as CA$227k for the year to July 2019. Notably, the salary of CA$225k is the vast majority of the CEO compensation. We looked at a group of companies with market capitalizations under CA$283m, and the median CEO total compensation was CA$223k.
Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Reko International Group. Speaking on an industry level, we can see that nearly 75% of total compensation represents salary, while the remainder of 25% is other remuneration. Reko International Group is focused on going down a more traditional approach and is paying a higher proportion of compensation through salary, as compared to non-salary benefits.
So Diane Reko receives a similar amount to the median CEO pay, amongst the companies we looked at. While this data point isn't particularly informative alone, it gains more meaning when considered with business performance. You can see, below, how CEO compensation at Reko International Group has changed over time.
Is Reko International Group Inc. Growing?
Over the last three years Reko International Group Inc. has shrunk its earnings per share by an average of 51% per year (measured with a line of best fit). It saw its revenue drop 2.7% over the last year.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the fact that revenue is down year on year arguably paints an ugly picture. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Reko International Group Inc. Been A Good Investment?
Since shareholders would have lost about 48% over three years, some Reko International Group Inc. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
Diane Reko is paid around the same as most CEOs of similar size companies.
The company isn't growing EPS, and shareholder returns have been disappointing. Suffice it to say, we don't think the CEO is underpaid! On another note, Reko International Group has 3 warning signs (and 2 which are significant) we think you should know about.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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.
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