Stock Analysis

Shareholders Will Likely Find Exco Technologies Limited's (TSE:XTC) CEO Compensation Acceptable

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The performance at Exco Technologies Limited (TSE:XTC) has been rather lacklustre of late and shareholders may be wondering what CEO Darren Kirk is planning to do about this. At the next AGM coming up on 26 January 2022, they can influence managerial decision making through voting on resolutions, including executive remuneration. Voting on executive pay could be a powerful way to influence management, as studies have shown that the right compensation incentives impact company performance. We think CEO compensation looks appropriate given the data we have put together.

View our latest analysis for Exco Technologies

How Does Total Compensation For Darren Kirk Compare With Other Companies In The Industry?

At the time of writing, our data shows that Exco Technologies Limited has a market capitalization of CA$393m, and reported total annual CEO compensation of CA$1.1m for the year to September 2021. That's a notable increase of 50% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CA$500k.

In comparison with other companies in the industry with market capitalizations ranging from CA$250m to CA$1.0b, the reported median CEO total compensation was CA$4.6m. This suggests that Darren Kirk is paid below the industry median. What's more, Darren Kirk holds CA$300k worth of shares in the company in their own name.

Component20212020Proportion (2021)
Salary CA$500k CA$450k 44%
Other CA$640k CA$312k 56%
Total CompensationCA$1.1m CA$762k100%

Speaking on an industry level, nearly 23% of total compensation represents salary, while the remainder of 77% is other remuneration. According to our research, Exco Technologies has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

TSX:XTC CEO Compensation January 20th 2022

A Look at Exco Technologies Limited's Growth Numbers

Over the last three years, Exco Technologies Limited has not seen its earnings per share change much, though they have deteriorated slightly. It achieved revenue growth of 12% over the last year.

The lack of EPS growth is certainly uninspiring. While the revenue growth is good to see, it is outweighed by the fact that EPS are down, over three years. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Exco Technologies Limited Been A Good Investment?

Exco Technologies Limited has generated a total shareholder return of 25% over three years, so most shareholders would be reasonably content. But they probably don't want to see the CEO paid more than is normal for companies around the same size.

To Conclude...

Shareholder returns while positive, need to be looked at along with earnings, which have failed to grow and this could mean that the current momentum may not continue. Shareholders might want to question the board about these concerns, and revisit their investment thesis for the company.

If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Exco Technologies.

Important note: Exco Technologies is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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