Here's Why Shareholders Should Examine mdf commerce inc.'s (TSE:MDF) CEO Compensation Package More Closely
Key Insights
mdf commerce will host its Annual General Meeting on 19th of September
Salary of CA$465.3k is part of CEO Luc Filiatreault's total remuneration
The overall pay is 37% above the industry average
mdf commerce's EPS declined by 57% over the past three years while total shareholder loss over the past three years was 50%
Shareholders will probably not be too impressed with the underwhelming results at mdf commerce inc. (TSE:MDF) recently. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 19th of September. It would also be an opportunity for shareholders to influence management through voting on company resolutions such as executive remuneration, which could impact the firm significantly. We present the case why we think CEO compensation is out of sync with company performance.
See our latest analysis for mdf commerce
Comparing mdf commerce inc.'s CEO Compensation With The Industry
According to our data, mdf commerce inc. has a market capitalization of CA$149m, and paid its CEO total annual compensation worth CA$537k over the year to March 2023. We note that's a decrease of 34% compared to last year. In particular, the salary of CA$465.3k, makes up a huge portion of the total compensation being paid to the CEO.
In comparison with other companies in the Canadian Interactive Media and Services industry with market capitalizations under CA$271m, the reported median total CEO compensation was CA$392k. Hence, we can conclude that Luc Filiatreault is remunerated higher than the industry median. Furthermore, Luc Filiatreault directly owns CA$276k worth of shares in the company.
Component | 2023 | 2022 | Proportion (2023) |
Salary | CA$465k | CA$465k | 87% |
Other | CA$71k | CA$347k | 13% |
Total Compensation | CA$537k | CA$813k | 100% |
Speaking on an industry level, nearly 87% of total compensation represents salary, while the remainder of 13% is other remuneration. mdf commerce is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.
mdf commerce inc.'s Growth
Over the last three years, mdf commerce inc. has shrunk its earnings per share by 57% per year. In the last year, its revenue is up 7.8%.
Overall this is not a very positive result for shareholders. And the modest revenue growth over 12 months isn't much comfort against the reduced EPS. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.
Has mdf commerce inc. Been A Good Investment?
Few mdf commerce inc. shareholders would feel satisfied with the return of -50% over three years. So shareholders would probably want the company to be less generous with CEO compensation.
To Conclude...
Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, the board will get the chance to explain the steps it plans to take to improve business performance.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. In our study, we found 2 warning signs for mdf commerce you should be aware of, and 1 of them is a bit concerning.
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.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
