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Should You Worry About BioSyent Inc.'s (CVE:RX) CEO Pay?

Simply Wall St

René Goehrum became the CEO of BioSyent Inc. (CVE:RX) in 1999. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we'll consider growth that the business demonstrates. Third, we'll reflect on the total return to shareholders over three years, as a second measure of business performance. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for BioSyent

How Does René Goehrum's Compensation Compare With Similar Sized Companies?

Our data indicates that BioSyent Inc. is worth CA$86m, and total annual CEO compensation was reported as CA$528k for the year to December 2018. While we always look at total compensation first, we note that the salary component is less, at CA$300k. We looked at a group of companies with market capitalizations under CA$263m, and the median CEO total compensation was CA$160k.

It would therefore appear that BioSyent Inc. pays René Goehrum 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.

The graphic below shows how CEO compensation at BioSyent has changed from year to year.

TSXV:RX CEO Compensation, October 14th 2019

Is BioSyent Inc. Growing?

BioSyent Inc. has increased its earnings per share (EPS) by an average of 9.8% a year, over the last three years (using a line of best fit). In the last year, its revenue is down 4.0%.

I would prefer it if there was revenue growth, but the improvement in EPS is good. It's hard to reach a conclusion about business performance right now. This may be one to watch. You might want to check this free visual report on analyst forecasts for future earnings.

Has BioSyent Inc. Been A Good Investment?

Given the total loss of 26% over three years, many shareholders in BioSyent Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

We compared the total CEO remuneration paid by BioSyent Inc., 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.

While we have not been overly impressed by the business performance, the shareholder returns, over three years, have been disappointing. Considering this, we have the opinion that the CEO pay is more on the generous side, than the modest side. Whatever your view on compensation, you might want to check if insiders are buying or selling BioSyent shares (free trial).

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.

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.