Some Shareholders May Object To A Pay Rise For Pioneering Technology Corp.'s (CVE:PTE) CEO This Year

The disappointing performance at Pioneering Technology Corp. (CVE:PTE) will make some shareholders rather disheartened. There is an opportunity for shareholders to influence management to turn the performance around by voting on resolutions such as executive remuneration at the AGM coming up on 30 March 2021. From our analysis below, we think CEO compensation looks appropriate for now.

Check out our latest analysis for Pioneering Technology

Comparing Pioneering Technology Corp.'s CEO Compensation With the industry

Our data indicates that Pioneering Technology Corp. has a market capitalization of CA$3.6m, and total annual CEO compensation was reported as CA$253k for the year to September 2020. Notably, that's an increase of 13% over the year before. In particular, the salary of CA$225.0k, makes up a huge portion of the total compensation being paid to the CEO.

For comparison, other companies in the industry with market capitalizations below CA$251m, reported a median total CEO compensation of CA$392k. That is to say, Kevin Callahan is paid under the industry median. What's more, Kevin Callahan holds CA$89k worth of shares in the company in their own name.

Component	2020	2019	Proportion (2020)
Salary	CA$225k	CA$225k	89%
Other	CA$28k	-	11%
Total Compensation	CA$253k	CA$225k	100%

On an industry level, roughly 31% of total compensation represents salary and 69% is other remuneration. It's interesting to note that Pioneering Technology pays out a greater portion of remuneration through salary, compared to the industry. 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 Pioneering Technology Corp.'s Growth Numbers

Pioneering Technology Corp. has reduced its earnings per share by 22% a year over the last three years. In the last year, its revenue is up 11%.

Overall this is not a very positive result for shareholders. There's no doubt that the silver lining is that revenue is up. But it isn't sufficiently fast growth to overlook the fact that EPS has gone backwards over three years. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. 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 Pioneering Technology Corp. Been A Good Investment?

With a total shareholder return of -82% over three years, Pioneering Technology Corp. shareholders would by and large be disappointed. So shareholders would probably want the company to be less generous with CEO compensation.

To Conclude...

Given that shareholders haven't seen any positive returns on their investment, not to mention the lack of earnings growth, this may suggest that few of them would be willing to award the CEO with a pay rise. At the upcoming AGM, they can question the management's plans and strategies to turn performance around and reassess their investment thesis in regards to the company.

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 did our research and identified 4 warning signs (and 2 which are concerning) in Pioneering Technology we think you should know about.

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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