We Think Shareholders May Consider Being More Generous With iFabric Corp.'s (TSE:IFA) CEO Compensation Package

The decent performance at iFabric Corp. (TSE:IFA) recently will please most shareholders as they go into the AGM coming up on 31 March 2021. The focus will probably be on the future strategic initiatives that the board and management will put in place to improve the business rather than executive remuneration when they cast their votes on company resolutions. We have prepared some analysis below and we show why we think CEO compensation looks decent with even the possibility for a raise.

See our latest analysis for iFabric

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

According to our data, iFabric Corp. has a market capitalization of CA$151m, and paid its CEO total annual compensation worth CA$379k over the year to September 2020. That's a notable increase of 26% on last year. Notably, the salary of CA$379k is the entirety of the CEO compensation.

For comparison, other companies in the industry with market capitalizations below CA$251m, reported a median total CEO compensation of CA$643k. That is to say, Hylton Karon is paid under the industry median. Furthermore, Hylton Karon directly owns CA$98m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2020	2019	Proportion (2020)
Salary	CA$379k	CA$300k	100%
Other	-	-	-
Total Compensation	CA$379k	CA$300k	100%

Talking in terms of the industry, salary represented approximately 29% of total compensation out of all the companies we analyzed, while other remuneration made up 71% of the pie. Speaking on a company level, iFabric prefers to tread along a traditional path, disbursing all compensation through a salary. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

A Look at iFabric Corp.'s Growth Numbers

Over the last three years, iFabric Corp. has shrunk its earnings per share by 30% per year. It achieved revenue growth of 56% over the last year.

Investors would be a bit wary of companies that have lower EPS But in contrast the revenue growth is strong, suggesting future potential for EPS growth. These two metrics are moving in different directions, so while it's hard to be confident judging performance, we think the stock is worth watching. While we don't have analyst forecasts for the company, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has iFabric Corp. Been A Good Investment?

We think that the total shareholder return of 78%, over three years, would leave most iFabric Corp. 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...

iFabric pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. While the company seems to be headed in the right direction performance-wise, there's always room for improvement. Assuming the business continues to grow at a good clip, few shareholders would raise any objections to the CEO's remuneration. Rather, investors would more likely want to engage on discussions related to key strategic initiatives and future growth opportunities for the company and set their longer-term expectations.

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 iFabric (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. 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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