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Should You Worry About Electrovaya Inc.'s (TSE:EFL) CEO Pay?

Simply Wall St

The CEO of Electrovaya Inc. (TSE:EFL) is Sankar Gupta. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. 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. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for Electrovaya

How Does Sankar Gupta's Compensation Compare With Similar Sized Companies?

Our data indicates that Electrovaya Inc. is worth CA$23m, and total annual CEO compensation was reported as US$206k for the year to September 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$195k. We examined a group of similar sized companies, with market capitalizations of below US$200m. The median CEO total compensation in that group is US$136k.

Thus we can conclude that Sankar Gupta receives more in total compensation than the median of a group of companies in the same market, and of similar size to Electrovaya Inc.. However, this doesn't necessarily mean the pay 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, below, how CEO compensation at Electrovaya has changed over time.

TSX:EFL CEO Compensation, November 9th 2019

Is Electrovaya Inc. Growing?

On average over the last three years, Electrovaya Inc. has grown earnings per share (EPS) by 20% each year (using a line of best fit). It achieved revenue growth of 22% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. We don't have analyst forecasts, but shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Electrovaya Inc. Been A Good Investment?

Given the total loss of 89% over three years, many shareholders in Electrovaya Inc. are probably rather dissatisfied, to say the least. So shareholders would probably think the company shouldn't be too generous with CEO compensation.

In Summary...

We compared total CEO remuneration at Electrovaya Inc. with the amount paid at companies with a similar market capitalization. Our data suggests that it pays above the median CEO pay within that group.

However we must not forget that the EPS growth has been very strong over three years. On the other hand returns to investors over the same period have probably disappointed many. While EPS is positive, we'd say shareholders would want better returns before the CEO is paid much more. So you may want to check if insiders are buying Electrovaya shares with their own money (free access).

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.