U.S. Markets closed

Why Covalon Technologies Ltd.'s (CVE:COV) CEO Pay Matters To You

Simply Wall St

Brian Pedlar has been the CEO of Covalon Technologies Ltd. (CVE:COV) since 2010. 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. This method should give us information to assess how appropriately the company pays the CEO.

View our latest analysis for Covalon Technologies

How Does Brian Pedlar's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Covalon Technologies Ltd. has a market cap of CA$52m, and reported total annual CEO compensation of CA$771k for the year to September 2018. We think total compensation is more important but we note that the CEO salary is lower, at CA$390k. We looked at a group of companies with market capitalizations under CA$261m, and the median CEO total compensation was CA$219k.

It would therefore appear that Covalon Technologies Ltd. pays Brian Pedlar 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. 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 Covalon Technologies, below.

TSXV:COV CEO Compensation, January 11th 2020

Is Covalon Technologies Ltd. Growing?

On average over the last three years, Covalon Technologies Ltd. has grown earnings per share (EPS) by 36% each year (using a line of best fit). Its revenue is up 14% over last year.

This demonstrates that the company has been improving recently. A good result. This sort of respectable year-on-year revenue growth is often seen at a healthy, growing business. It could be important to check this free visual depiction of what analysts expect for the future.

Has Covalon Technologies Ltd. Been A Good Investment?

With a three year total loss of 8.6%, Covalon Technologies Ltd. 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 Covalon Technologies Ltd., and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark 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. Shareholders may want to check for free if Covalon Technologies insiders are buying or selling shares.

If you want to buy a stock that is better than Covalon Technologies, this free list of high return, low debt companies is a great place to look.

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.

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. Thank you for reading.