Here's What We Think About iFabric's (TSE:IFA) CEO Pay

This article will reflect on the compensation paid to Hylton Karon who has served as CEO of iFabric Corp. (TSE:IFA) since 2011. 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 iFabric

How Does Total Compensation For Hylton Karon Compare With Other Companies In The Industry?

Our data indicates that iFabric Corp. has a market capitalization of CA$95m, and total annual CEO compensation was reported as CA$379k for the year to September 2020. Notably, that's an increase of 26% over the year before. Notably, the salary which is CA$300.0k, represents most of the total compensation being paid.

In comparison with other companies in the industry with market capitalizations under CA$255m, the reported median total CEO compensation was CA$529k. From this we gather that Hylton Karon is paid around the median for CEOs in the industry. What's more, Hylton Karon holds CA$76m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Speaking on an industry level, nearly 28% of total compensation represents salary, while the remainder of 72% is other remuneration. According to our research, iFabric has allocated a higher percentage of pay to salary in comparison to the wider industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

iFabric Corp.'s Growth

iFabric Corp. has reduced its earnings per share by 93% a year over the last three years. In the last year, its revenue is up 10%.

Overall this is not a very positive result for shareholders. While the revenue growth is good to see, it is outweighed by the fact that EPS are down, over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has iFabric Corp. Been A Good Investment?

iFabric Corp. has served shareholders reasonably well, with a total return of 25% over three years. But they probably wouldn't be so happy as to think the CEO should be paid more than is normal, for companies around this size.

In Summary...

As we noted earlier, iFabric pays its CEO in line with similar-sized companies belonging to the same industry. iFabric has had a poor showing when it comes to EPS growth, and it's tough to say that shareholder returns have done much to excite us. These figures do not go well against CEO compensation, which is more or less equal to the industry median. We would stop short of the compensation is inappropriate, but we can't say the executive is underpaid.

It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. That's why we did our research, and identified 2 warning signs for iFabric (of which 1 shouldn't be ignored!) that you should know about in order to have a holistic understanding of the stock.

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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