Stock Analysis

Why We Think Shareholders May Be Considering Bumping Up UGE International Ltd.'s (CVE:UGE) CEO Compensation

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The solid performance at UGE International Ltd. (CVE:UGE) has been impressive and shareholders will probably be pleased to know that CEO Nick Blitterswyk has delivered. At the upcoming AGM on 17 September 2021, they would be interested to hear about the company strategy going forward and get a chance to cast their votes on resolutions such as executive remuneration and other company matters. Let's take a look at why we think the CEO has done a good job and we'll present the case for a bump in pay.

Check out our latest analysis for UGE International

Comparing UGE International Ltd.'s CEO Compensation With the industry

At the time of writing, our data shows that UGE International Ltd. has a market capitalization of CA$45m, and reported total annual CEO compensation of US$186k for the year to December 2020. That's a fairly small increase of 6.4% over the previous year. In particular, the salary of US$146.2k, makes up a huge portion of the total compensation being paid to the CEO.

On comparing similar-sized companies in the industry with market capitalizations below CA$253m, we found that the median total CEO compensation was US$1.1m. Accordingly, UGE International pays its CEO under the industry median. Moreover, Nick Blitterswyk also holds CA$1.9m worth of UGE International stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20202019Proportion (2020)
Salary US$146k US$150k 79%
Other US$40k US$25k 21%
Total CompensationUS$186k US$175k100%

On an industry level, around 21% of total compensation represents salary and 79% is other remuneration. UGE International pays out 79% of remuneration in the form of a salary, significantly higher than the industry average. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

TSXV:UGE CEO Compensation September 11th 2021

UGE International Ltd.'s Growth

UGE International Ltd. has seen its earnings per share (EPS) increase by 84% a year over the past three years. Its revenue is down 48% over the previous year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. 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 UGE International Ltd. Been A Good Investment?

We think that the total shareholder return of 88%, over three years, would leave most UGE International Ltd. shareholders smiling. 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.

In Summary...

Seeing that company performance has been quite good recently, some shareholders may feel that CEO compensation may not be the biggest focus in the upcoming AGM. Seeing that earnings growth and share price performance seems to be on the right path, the more pressing focus for shareholders at the AGM may be how the board and management plans to turn the company into a sustainably profitable one.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 6 warning signs for UGE International (2 are a bit concerning!) that you should be aware of before investing here.

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.

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This article by Simply Wall St 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. Simply Wall St has no position in any stocks mentioned.
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