David Wolf became the CEO of Hamilton Thorne Ltd. (CVE:HTL) in 2011. 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 David Wolf's Compensation Compare With Similar Sized Companies?
At the time of writing, our data says that Hamilton Thorne Ltd. has a market cap of CA$134m, and reported total annual CEO compensation of US$467k for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$295k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO total compensation to be US$157k.
Pay mix tells us a lot about how a company functions versus the wider industry, and it's no different in the case of Hamilton Thorne. On a sector level, around 80% of total compensation represents salary and 20% is other remuneration. Our data reveals that Hamilton Thorne allocates salary in line with the wider market.
It would therefore appear that Hamilton Thorne Ltd. pays David Wolf more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn't mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance. You can see, below, how CEO compensation at Hamilton Thorne has changed over time.
Is Hamilton Thorne Ltd. Growing?
Over the last three years Hamilton Thorne Ltd. has seen earnings per share (EPS) move in a positive direction by an average of 16% per year (using a line of best fit). Its revenue is up 15% over last year.
This demonstrates that the company has been improving recently. A good result. It's a real positive to see this sort of growth in a single year. That suggests a healthy and growing business. It could be important to check this free visual depiction of what analysts expect for the future.
Has Hamilton Thorne Ltd. Been A Good Investment?
Boasting a total shareholder return of 75% over three years, Hamilton Thorne Ltd. has done well by shareholders. This strong performance might mean some shareholders don't mind if the CEO were to be paid more than is normal for a company of its size.
We examined the amount Hamilton Thorne Ltd. pays its CEO, and compared it to the amount paid by similar sized companies. We found that it pays well over the median amount paid in the benchmark group.
However, the earnings per share growth over three years is certainly impressive. On top of that, in the same period, returns to shareholders have been great. So, considering this good performance, the CEO compensation may be quite appropriate. Looking into other areas, we've picked out 5 warning signs for Hamilton Thorne that investors should think about before committing capital to this stock.
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 firstname.lastname@example.org. 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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