Does Electrovaya Inc.’s (TSE:EFL) CEO Pay Matter?

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The CEO of Electrovaya Inc. (TSE:EFL) is Sankar Gupta. 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.

View our latest analysis for Electrovaya

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

At the time of writing our data says that Electrovaya Inc. has a market cap of CA$34m, and is paying total annual CEO compensation of US$206k. (This is based on the year to September 2018). While we always look at total compensation first, we note that the salary component is less, at US$195k. We took a group of companies with market capitalizations below US$200m, and calculated the median CEO total compensation to be US$92k.

It would therefore appear that Electrovaya Inc. pays Sankar Gupta 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.

You can see, below, how CEO compensation at Electrovaya has changed over time.

TSX:EFL CEO Compensation, July 9th 2019
TSX:EFL CEO Compensation, July 9th 2019

Is Electrovaya Inc. Growing?

Electrovaya Inc. has reduced its earnings per share by an average of 15% a year, over the last three years (measured with a line of best fit). In the last year, its revenue is down -7.5%.

Unfortunately, earnings per share have trended lower over the last three years. And the fact that revenue is down year on year arguably paints an ugly picture. It’s hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration.

Has Electrovaya Inc. Been A Good Investment?

Given the total loss of 91% over three years, many shareholders in Electrovaya 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 Electrovaya Inc., and compared it to remuneration at a group of similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

Earnings per share have not grown in three years, and the revenue growth fails to impress us.

Over the same period, investors would have come away with nothing in the way of share price gains. In our opinion the CEO might be paid too generously! 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.