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Is ENTREC Corporation's (TSE:ENT) CEO Pay Justified?

Simply Wall St

John Stevens became the CEO of ENTREC Corporation (TSE:ENT) in 2014. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for ENTREC

How Does John Stevens's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that ENTREC Corporation has a market cap of CA$8.8m, and is paying total annual CEO compensation of CA$331k. (This figure is for the year to December 2018). It is worth noting that the CEO compensation consists almost entirely of the salary, worth CA$320k. We looked at a group of companies with market capitalizations under CA$266m, and the median CEO total compensation was CA$142k.

Thus we can conclude that John Stevens receives more in total compensation than the median of a group of companies in the same market, and of similar size to ENTREC Corporation. However, this doesn't necessarily mean the pay is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see a visual representation of the CEO compensation at ENTREC, below.

TSX:ENT CEO Compensation, August 30th 2019

Is ENTREC Corporation Growing?

On average over the last three years, ENTREC Corporation has grown earnings per share (EPS) by 13% each year (using a line of best fit). In the last year, its revenue is up 12%.

This demonstrates that the company has been improving recently. A good result. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. Although we don't have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has ENTREC Corporation Been A Good Investment?

With a three year total loss of 68%, ENTREC Corporation would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

We compared total CEO remuneration at ENTREC Corporation with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.

However, the earnings per share growth over three years is certainly impressive. However, the returns to investors are far less impressive, over the same period. Considering the per share profit growth, but keeping in mind the weak returns, we'd need more time to form a view on CEO compensation. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at ENTREC.

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.

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.