Stephen Sadler has been the CEO of Enghouse Systems Limited (TSE:ENGH) since 2000. First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This process should give us an idea about how appropriately the CEO is paid.
How Does Stephen Sadler’s Compensation Compare With Similar Sized Companies?
According to our data, Enghouse Systems Limited has a market capitalization of CA$2.6b, and paid its CEO total annual compensation worth CA$4.6m over the year to October 2018. While we always look at total compensation first, we note that the salary component is less, at CA$615k. Importantly, there may be performance hurdles relating to the non-salary component of the total compensation. We examined companies with market caps from CA$1.3b to CA$4.2b, and discovered that the median CEO total compensation of that group was CA$2.9m.
As you can see, Stephen Sadler is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Enghouse Systems Limited is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
You can see, below, how CEO compensation at Enghouse Systems has changed over time.
Is Enghouse Systems Limited Growing?
Enghouse Systems Limited has increased its earnings per share (EPS) by an average of 13% a year, over the last three years (using a line of best fit). It achieved revenue growth of 13% 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. You might want to check this free visual report on analyst forecasts for future earnings.
Has Enghouse Systems Limited Been A Good Investment?
Most shareholders would probably be pleased with Enghouse Systems Limited for providing a total return of 81% over three years. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.
We examined the amount Enghouse Systems Limited pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
Importantly, though, the company has impressed with its earnings per share growth, over three years. On top of that, in the same period, returns to shareholders have been great. As a result of this good performance, the CEO remuneration may well be quite reasonable. Shareholders may want to check for free if Enghouse Systems insiders are buying or selling shares.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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