How Does Avante Logixx's (CVE:XX) CEO Pay Compare With Company Performance?

Craig Campbell became the CEO of Avante Logixx Inc. (CVE:XX) in 2018, and we think it's a good time to look at the executive's compensation against the backdrop of overall company performance. This analysis will also look to assess whether the CEO is appropriately paid, considering recent earnings growth and investor returns for Avante Logixx.

View our latest analysis for Avante Logixx

How Does Total Compensation For Craig Campbell Compare With Other Companies In The Industry?

At the time of writing, our data shows that Avante Logixx Inc. has a market capitalization of CA$36m, and reported total annual CEO compensation of CA$393k for the year to March 2020. We note that's an increase of 31% above last year. In particular, the salary of CA$375.0k, 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$252m, reported a median total CEO compensation of CA$981k. In other words, Avante Logixx pays its CEO lower than the industry median. Moreover, Craig Campbell also holds CA$5.0m worth of Avante Logixx stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

On an industry level, around 22% of total compensation represents salary and 78% is other remuneration. Avante Logixx has gone down a largely traditional route, paying Craig Campbell a high salary, giving it preference over non-salary benefits. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

Avante Logixx Inc.'s Growth

Over the last three years, Avante Logixx Inc. has shrunk its earnings per share by 77% per year. In the last year, its revenue is up 89%.

The reduction in EPS, over three years, is arguably concerning. 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. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Avante Logixx Inc. Been A Good Investment?

Given the total shareholder loss of 2.9% over three years, many shareholders in Avante Logixx Inc. are probably rather dissatisfied, to say the least. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Craig receives almost all of their compensation through a salary. As we touched on above, Avante Logixx Inc. is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. But poor shareholder returns EPS growth have hampered the company over the past three years. On the flip side, recent revenue growth has been positive. Although it's fair to say CEO compensation is modest, shareholders might want to see healthier investor returns before thinking Craig deserves a raise.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We identified 4 warning signs for Avante Logixx (2 make us uncomfortable!) that you should be aware of before investing here.

Important note: Avante Logixx is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE 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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