Stock Analysis

What We Learned About Electrovaya's (TSE:EFL) CEO Pay

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The CEO of Electrovaya Inc. (TSE:EFL) is Sankar Gupta, and this article examines the executive's compensation against the backdrop of overall company performance. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.

See our latest analysis for Electrovaya

Comparing Electrovaya Inc.'s CEO Compensation With the industry

According to our data, Electrovaya Inc. has a market capitalization of CA$302m, and paid its CEO total annual compensation worth US$197k over the year to September 2020. That is, the compensation was roughly the same as last year. Notably, the salary which is US$186.1k, represents most of the total compensation being paid.

On examining similar-sized companies in the industry with market capitalizations between CA$126m and CA$505m, we discovered that the median CEO total compensation of that group was US$593k. In other words, Electrovaya pays its CEO lower than the industry median. Moreover, Sankar Gupta also holds CA$111m worth of Electrovaya stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20202019Proportion (2020)
Salary US$186k US$188k 94%
Other US$11k US$11k 6%
Total CompensationUS$197k US$199k100%

Speaking on an industry level, nearly 98% of total compensation represents salary, while the remainder of 1.7% is other remuneration. Electrovaya is largely mirroring the industry average when it comes to the share a salary enjoys in overall compensation. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

TSX:EFL CEO Compensation February 16th 2021

Electrovaya Inc.'s Growth

Over the past three years, Electrovaya Inc. has seen its earnings per share (EPS) grow by 64% per year. Its revenue is up 329% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. The combination of strong revenue growth with medium-term EPS improvement certainly points to the kind of growth we like to see. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.

Has Electrovaya Inc. Been A Good Investment?

Boasting a total shareholder return of 661% over three years, Electrovaya Inc. has done well by shareholders. 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.

To Conclude...

As previously discussed, Sankar is compensated less than what is normal for CEOs of companies of similar size, and which belong to the same industry. Considering robust EPS growth, we believe Sankar to be modestly paid. And given most shareholders are probably very happy with recent shareholder returns, they might even think Sankar deserves a raise!

CEO pay is simply one of the many factors that need to be considered while examining business performance. We did our research and identified 6 warning signs (and 2 which make us uncomfortable) in Electrovaya we think you should know about.

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

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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. 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. Simply Wall St has no position in any stocks mentioned.
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