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Is Snipp Interactive Inc.'s (CVE:SPN) CEO Being Overpaid?

Simply Wall St

Atul Sabharwal became the CEO of Snipp Interactive Inc. (CVE:SPN) in 2012. 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. 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.

View our latest analysis for Snipp Interactive

How Does Atul Sabharwal's Compensation Compare With Similar Sized Companies?

According to our data, Snipp Interactive Inc. has a market capitalization of CA$6.8m, and paid its CEO total annual compensation worth US$313k over the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$263k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO total compensation to be US$120k.

It would therefore appear that Snipp Interactive Inc. pays Atul Sabharwal 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 a visual representation of the CEO compensation at Snipp Interactive, below.

TSXV:SPN CEO Compensation, October 11th 2019

Is Snipp Interactive Inc. Growing?

On average over the last three years, Snipp Interactive Inc. has grown earnings per share (EPS) by 75% each year (using a line of best fit). Its revenue is down 14% over last year.

This demonstrates that the company has been improving recently. A good result. While it would be good to see revenue growth, profits matter more in the end. We don't have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has Snipp Interactive Inc. Been A Good Investment?

With a three year total loss of 79%, Snipp Interactive Inc. would certainly have some dissatisfied shareholders. It therefore might be upsetting for shareholders if the CEO were paid generously.

In Summary...

We compared the total CEO remuneration paid by Snipp Interactive Inc., and compared it to remuneration at a group of similar sized companies. 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. Having said that, shareholders may be disappointed with the weak returns over the last three years. While EPS is positive, we'd say shareholders would want better returns before the CEO is paid much more. If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Snipp Interactive.

Important note: Snipp Interactive 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.

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.