Is Supremex Inc.'s (TSE:SXP) CEO Overpaid Relative To Its Peers?
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In 2014 Stewart Emerson was appointed CEO of Supremex Inc. (TSE:SXP). First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
See our latest analysis for Supremex
How Does Stewart Emerson's Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Supremex Inc. has a market cap of CA$77m, and is paying total annual CEO compensation of CA$444k. (This figure is for the year to December 2017). We think total compensation is more important but we note that the CEO salary is lower, at CA$350k. We examined a group of similar sized companies, with market capitalizations of below CA$268m. The median CEO total compensation in that group is CA$151k.
As you can see, Stewart Emerson is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Supremex Inc. is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see a visual representation of the CEO compensation at Supremex, below.
Is Supremex Inc. Growing?
Supremex Inc. has reduced its earnings per share by an average of 46% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is up 7.1%.
Few shareholders would be pleased to read that earnings per share are lower over three years. The fairly low revenue growth fails to impress given that the earnings per share is down. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. It could be important to check this free visual depiction of what analysts expect for the future.
Has Supremex Inc. Been A Good Investment?
Since shareholders would have lost about 39% over three years, some Supremex Inc. shareholders would surely be feeling negative emotions. So shareholders would probably think the company shouldn't be too generous with CEO compensation.
In Summary...
We compared total CEO remuneration at Supremex Inc. with the amount paid at companies with a similar market capitalization. As discussed above, we discovered that the company pays more than the median of that group.
Earnings per share have not grown in three years, and the revenue growth fails to impress us.
Over the same period, investors would have come away with nothing in the way of share price gains. In our opinion the CEO might be paid too generously! Shareholders may want to check for free if Supremex insiders are buying or selling shares.
Important note: Supremex 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.
