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We Think Shareholders Are Less Likely To Approve A Large Pay Rise For Absolute Software Corporation's (TSE:ABST) CEO For Now

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·3 min read
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Under the guidance of CEO Christy Wyatt, Absolute Software Corporation (TSE:ABST) has performed reasonably well recently. In light of this performance, CEO compensation will probably not be the main focus for shareholders as they go into the AGM on 14 December 2021. However, some shareholders may still want to keep CEO compensation within reason.

View our latest analysis for Absolute Software

How Does Total Compensation For Christy Wyatt Compare With Other Companies In The Industry?

According to our data, Absolute Software Corporation has a market capitalization of CA$558m, and paid its CEO total annual compensation worth US$1.9m over the year to June 2021. Notably, that's an increase of 45% over the year before. While we always look at total compensation first, our analysis shows that the salary component is less, at US$420k.

On examining similar-sized companies in the industry with market capitalizations between CA$253m and CA$1.0b, we discovered that the median CEO total compensation of that group was US$235k. Hence, we can conclude that Christy Wyatt is remunerated higher than the industry median. Moreover, Christy Wyatt also holds CA$1.1m worth of Absolute Software stock directly under their own name.

Component

2021

2020

Proportion (2021)

Salary

US$420k

US$420k

22%

Other

US$1.5m

US$895k

78%

Total Compensation

US$1.9m

US$1.3m

100%

On an industry level, roughly 87% of total compensation represents salary and 13% is other remuneration. Absolute Software pays a modest slice of remuneration through salary, as compared to the broader industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.

ceo-compensation
ceo-compensation

A Look at Absolute Software Corporation's Growth Numbers

Over the last three years, Absolute Software Corporation has shrunk its earnings per share by 21% per year. In the last year, its revenue is up 27%.

The reduction in EPS, over three years, is arguably concerning. But on the other hand, revenue growth is strong, suggesting a brighter future. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. 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 Absolute Software Corporation Been A Good Investment?

Most shareholders would probably be pleased with Absolute Software Corporation for providing a total return of 46% over three years. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

In Summary...

Some shareholders will be pleased by the relatively good results, however, the results could still be improved. EPS growth is still weak, and until that picks up, shareholders may find it hard to approve a pay rise for the CEO, since they are already paid above the average in their industry.

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 did our research and identified 4 warning signs (and 2 which are a bit unpleasant) in Absolute Software we think you should know about.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

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

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.