Stock Analysis

Shareholders May Be More Conservative With Wajax Corporation's (TSE:WJX) CEO Compensation For Now

TSX:WJX
Source: Shutterstock

Performance at Wajax Corporation (TSE:WJX) has been reasonably good and CEO A. Foote has done a decent job of steering the company in the right direction. As shareholders go into the upcoming AGM on 04 May 2021, CEO compensation will probably not be their focus, but rather the steps management will take to continue the growth momentum. However, some shareholders will still be cautious of paying the CEO excessively.

View our latest analysis for Wajax

How Does Total Compensation For A. Foote Compare With Other Companies In The Industry?

Our data indicates that Wajax Corporation has a market capitalization of CA$435m, and total annual CEO compensation was reported as CA$2.3m for the year to December 2020. This means that the compensation hasn't changed much from last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CA$701k.

On examining similar-sized companies in the industry with market capitalizations between CA$248m and CA$992m, we discovered that the median CEO total compensation of that group was CA$957k. This suggests that A. Foote is paid more than the median for the industry. Moreover, A. Foote also holds CA$2.2m worth of Wajax stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20202019Proportion (2020)
Salary CA$701k CA$786k 30%
Other CA$1.6m CA$1.6m 70%
Total CompensationCA$2.3m CA$2.4m100%

Speaking on an industry level, nearly 55% of total compensation represents salary, while the remainder of 45% is other remuneration. Wajax sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

ceo-compensation
TSX:WJX CEO Compensation April 28th 2021

A Look at Wajax Corporation's Growth Numbers

Wajax Corporation's earnings per share (EPS) grew 4.2% per year over the last three years. Its revenue is down 8.4% over the previous year.

We generally like to see a little revenue growth, but it is good to see a modest EPS growth at least. In conclusion we can't form a strong opinion about business performance yet; but it's one worth watching. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Wajax Corporation Been A Good Investment?

Wajax Corporation has not done too badly by shareholders, with a total return of 6.0%, over three years. It would be nice to see that metric improve in the future. As a result, investors in the company might be reluctant about agreeing to increase CEO pay in the future, before seeing an improvement on their returns.

To Conclude...

Given that the company's overall performance has been reasonable, the CEO remuneration policy might not be shareholders' central point of focus in the upcoming AGM. However, if the board proposes to increase the compensation, some shareholders might have questions given that the CEO is already being paid higher than the industry.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 5 warning signs for Wajax that you should be aware of before investing.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies that have HIGH return on equity and low debt.

If you decide to trade Wajax, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted


Valuation is complex, but we're helping make it simple.

Find out whether Wajax is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020


Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.