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Here's Why UGE International Ltd.'s (CVE:UGE) CEO May Deserve A Raise

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·3 min read
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The impressive results at UGE International Ltd. (CVE:UGE) recently will be great news for shareholders. This would be kept in mind at the upcoming AGM on 17 September 2021 which will be a chance for them to hear the board review the financial results, discuss future company strategy and vote on resolutions such as executive remuneration and other matters. Here we will show why we think CEO compensation is appropriate and discuss the case for a pay rise.

Check out our latest analysis for UGE International

How Does Total Compensation For Nick Blitterswyk Compare With Other Companies In The Industry?

According to our data, UGE International Ltd. has a market capitalization of CA$45m, and paid its CEO total annual compensation worth US$186k over the year to December 2020. That's a modest increase of 6.4% on the prior year. Notably, the salary which is US$146.2k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under CA$253m, the reported median total CEO compensation was US$1.1m. In other words, UGE International pays its CEO lower than the industry median. Moreover, Nick Blitterswyk also holds CA$1.9m worth of UGE International stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component

2020

2019

Proportion (2020)

Salary

US$146k

US$150k

79%

Other

US$40k

US$25k

21%

Total Compensation

US$186k

US$175k

100%

Speaking on an industry level, nearly 21% of total compensation represents salary, while the remainder of 79% is other remuneration. It's interesting to note that UGE International pays out a greater portion of remuneration through salary, compared to the industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

ceo-compensation
ceo-compensation

UGE International Ltd.'s Growth

UGE International Ltd. has seen its earnings per share (EPS) increase by 84% a year over the past three years. In the last year, its revenue is down 48%.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. 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 UGE International Ltd. Been A Good Investment?

We think that the total shareholder return of 88%, over three years, would leave most UGE International Ltd. shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Some shareholders will probably be more lenient on CEO compensation in the upcoming AGM given the pleasing performance of the company recently. However, despite the strong growth in earnings and share price growth, the focus for shareholders would be how the company plans to steer the company towards sustainable profitability in the near future.

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 identified 6 warning signs for UGE International (2 don't sit too well with us!) that you should be aware of before investing here.

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. 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.

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