Stock Analysis

Here's Why Blackline Safety Corp.'s (CVE:BLN) CEO May Deserve A Raise

TSX:BLN
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The impressive results at Blackline Safety Corp. (CVE:BLN) recently will be great news for shareholders. This would be kept in mind at the upcoming AGM on 30 March 2021 which will be a chance for them to hear the board review the financial results, discuss future company strategy and vote on resolutions such as executive remuneration and other matters. Here we will show why we think CEO compensation is appropriate and discuss the case for a pay rise.

See our latest analysis for Blackline Safety

Comparing Blackline Safety Corp.'s CEO Compensation With the industry

Our data indicates that Blackline Safety Corp. has a market capitalization of CA$462m, and total annual CEO compensation was reported as CA$267k for the year to October 2020. That's a modest increase of 6.4% on the prior year. We note that the salary portion, which stands at CA$185.0k constitutes the majority of total compensation received by the CEO.

On comparing similar companies from the same industry with market caps ranging from CA$251m to CA$1.0b, we found that the median CEO total compensation was CA$1.4m. In other words, Blackline Safety pays its CEO lower than the industry median. What's more, Cody Slater holds CA$12m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component20202019Proportion (2020)
Salary CA$185k CA$154k 69%
Other CA$82k CA$97k 31%
Total CompensationCA$267k CA$251k100%

Talking in terms of the broader industry, salary and other compensation roughly make up 50% each, of the total compensation. Blackline Safety is paying a higher share of its remuneration through a salary in comparison to the overall industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

ceo-compensation
TSXV:BLN CEO Compensation March 24th 2021

Blackline Safety Corp.'s Growth

Over the past three years, Blackline Safety Corp. has seen its earnings per share (EPS) grow by 12% per year. Its revenue is up 15% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. 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 Blackline Safety Corp. Been A Good Investment?

Most shareholders would probably be pleased with Blackline Safety Corp. for providing a total return of 48% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

To Conclude...

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.

CEO compensation is an important area to keep your eyes on, but we've also need to pay attention to other attributes of the company. We identified 3 warning signs for Blackline Safety (1 doesn't sit too well with us!) that you should be aware of before investing here.

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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