It's Probably Less Likely That XS Financial Inc.'s (CSE:XSF) CEO Will See A Huge Pay Rise This Year

Key Insights

• XS Financial will host its Annual General Meeting on 27th of November
• Total pay for CEO David Kivitz includes US$250.0k salary
• The overall pay is comparable to the industry average
• XS Financial's three-year loss to shareholders was 79% while its EPS grew by 13% over the past three years

Shareholders of XS Financial Inc. (CSE:XSF) will have been dismayed by the negative share price return over the last three years. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. Shareholders may want to question the board on the future direction of the company at the upcoming AGM on 27th of November. Voting on resolutions such as executive remuneration and other matters could also be a way to influence management. We discuss below why we think shareholders should be cautious of approving a raise for the CEO at the moment.

Check out our latest analysis for XS Financial

How Does Total Compensation For David Kivitz Compare With Other Companies In The Industry?

Our data indicates that XS Financial Inc. has a market capitalization of CA$4.2m, and total annual CEO compensation was reported as US$417k for the year to December 2022. Notably, that's an increase of 67% over the year before. We note that the salary of US$250.0k makes up a sizeable portion of the total compensation received by the CEO.

For comparison, other companies in the Canadian Diversified Financial industry with market capitalizations below CA$274m, reported a median total CEO compensation of US$338k. From this we gather that David Kivitz is paid around the median for CEOs in the industry.

Component	2022	2021	Proportion (2022)
Salary	US$250k	US$125k	60%
Other	US$167k	US$125k	40%
Total Compensation	US$417k	US$250k	100%

Talking in terms of the industry, salary represented approximately 53% of total compensation out of all the companies we analyzed, while other remuneration made up 47% of the pie. According to our research, XS Financial has allocated a higher percentage of pay to salary in comparison to the wider industry. If salary dominates total compensation, it suggests that CEO compensation is leaning less towards the variable component, which is usually linked with performance.

A Look at XS Financial Inc.'s Growth Numbers

Over the past three years, XS Financial Inc. has seen its earnings per share (EPS) grow by 13% per year. It achieved revenue growth of 104% over the last year.

Shareholders would be glad to know that the company has improved itself over the last few years. It's great to see that revenue growth is strong, too. These metrics suggest the business is growing strongly. 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 XS Financial Inc. Been A Good Investment?

Few XS Financial Inc. shareholders would feel satisfied with the return of -79% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Shareholders have not seen their shares grow in value, rather they have seen their shares decline. The stock's movement is disjointed with the company's earnings growth, which ideally should move in the same direction. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. The upcoming AGM will be a chance for shareholders to question the board on key matters, such as CEO remuneration or any other issues they might have and revisit their investment thesis with regards to the company.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. That's why we did some digging and identified 3 warning signs for XS Financial that you should be aware of before investing.

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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.