Graham Drake has been the CEO of Cervus Equipment Corporation (TSE:CERV) since 2012. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. 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.
Check out our latest analysis for Cervus Equipment
How Does Graham Drake's Compensation Compare With Similar Sized Companies?
According to our data, Cervus Equipment Corporation has a market capitalization of CA$197m, and pays its CEO total annual compensation worth CA$884k. (This is based on the year to 2017). We think total compensation is more important but we note that the CEO salary is lower, at CA$415k. We took a group of companies with market capitalizations below CA$273m, and calculated the median CEO compensation to be CA$160k.
It would therefore appear that Cervus Equipment Corporation pays Graham Drake 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 get a better idea of how generous the pay is by looking at the performance of the underlying business. So this freevisualization of the analyst consensus on future earnings could help you make the right decision about whether to buy, sell, or hold.
You can see a visual representation of the CEO compensation at Cervus Equipment, below.
Is Cervus Equipment Corporation Growing?
Cervus Equipment Corporation has increased its earnings per share (EPS) by an average of 76% a year, over the last three years Its revenue is up 8.4% over last year.
This demonstrates that the company has been improving recently. A good result. It's also good to see modest revenue growth, suggesting the underlying business is healthy.
Has Cervus Equipment Corporation Been A Good Investment?
With a total shareholder return of 2.4% over three years, Cervus Equipment Corporation has done okay by shareholders. But they would probably prefer not to see CEO compensation far in excess of the median.
In Summary...
We examined the amount Cervus Equipment Corporation 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.
However we must not forget that the EPS growth has been very strong over three years. We also think investors are doing ok, over the same time period. While it may be worth researching further, we don't see a problem with the CEO pay, given the good EPS growth. Whatever your view on compensation, you might want to check if insiders are buying or selling Cervus Equipment shares (free trial).
Important note: Cervus Equipment may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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