Tony Wang became the CEO of EA Education Group Inc. (CNSX:EA) in 2013. 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. 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 Tony Wang's Compensation Compare With Similar Sized Companies?
According to our data, EA Education Group Inc. has a market capitalization of CA$1.5m, and paid its CEO total annual compensation worth CA$90k over the year to August 2018. It is worth noting that the CEO compensation consists almost entirely of the salary, worth CA$90k. We looked at a group of companies with market capitalizations under CA$267m, and the median CEO total compensation was CA$159k.
A first glance this seems like a real positive for shareholders, since Tony Wang is paid less than the average total compensation paid by similar sized companies. While this is a good thing, you'll need to understand the business better before you can form an opinion.
The graphic below shows how CEO compensation at EA Education Group has changed from year to year.
Is EA Education Group Inc. Growing?
On average over the last three years, EA Education Group Inc. has grown earnings per share (EPS) by 21% each year (using a line of best fit). Its revenue is up 100% over last year.
This demonstrates that the company has been improving recently. A good result. The combination of strong revenue growth with medium-term earnings per share improvement certainly points to the kind of growth I like to see. Although we don't have analyst forecasts you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has EA Education Group Inc. Been A Good Investment?
Since shareholders would have lost about 96% over three years, some EA Education Group Inc. shareholders would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
EA Education Group Inc. is currently paying its CEO below what is normal for companies of its size.
Many would consider this to indicate that the pay is modest since the business is growing. Few would deny that the total shareholder return over the last three years could have been a lot better. We're not critical of the remuneration Tony Wang receives, but it would be good to see improved returns to shareholders before the remuneration grows too much. When I see fairly low remuneration, combined with earnings per share growth, but without big share price gains, it makes me want to research the potential for future gains. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at EA Education Group.
Important note: EA Education Group may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
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