Steve King has been the CEO of Alaris Equity Partners Income Trust (TSE:AD.UN) since 2004, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Alaris Equity Partners Income Trust pays its CEO appropriately, considering recent earnings growth and total shareholder returns.
Comparing Alaris Equity Partners Income Trust's CEO Compensation With the industry
At the time of writing, our data shows that Alaris Equity Partners Income Trust has a market capitalization of CA$437m, and reported total annual CEO compensation of CA$1.1m for the year to December 2019. That's a notable decrease of 46% on last year. While we always look at total compensation first, our analysis shows that the salary component is less, at CA$356k.
On examining similar-sized companies in the industry with market capitalizations between CA$264m and CA$1.1b, we discovered that the median CEO total compensation of that group was CA$3.6m. In other words, Alaris Equity Partners Income Trust pays its CEO lower than the industry median.
Talking in terms of the industry, salary represented approximately 41% of total compensation out of all the companies we analyzed, while other remuneration made up 59% of the pie. Alaris Equity Partners Income Trust sets aside a smaller share of compensation for salary, in comparison to the overall industry. If non-salary compensation dominates total pay, it's an indicator that the executive's salary is tied to company performance.
A Look at Alaris Equity Partners Income Trust's Growth Numbers
Over the last three years, Alaris Equity Partners Income Trust has shrunk its earnings per share by 17% per year. It saw its revenue drop 69% over the last year.
Overall this is not a very positive result for shareholders. And the fact that revenue is down year on year arguably paints an ugly picture. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..
Has Alaris Equity Partners Income Trust Been A Good Investment?
Since shareholders would have lost about 29% over three years, some Alaris Equity Partners Income Trust investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.
As we touched on above, Alaris Equity Partners Income Trust is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. EPS growth has failed to impress us, and the same can be said about shareholder returns. Although we wouldn’t say CEO compensation is high, it’s tough to foresee shareholders warming up to thoughts of a bump anytime soon.
CEO pay is simply one of the many factors that need to be considered while examining business performance. That's why we did our research, and identified 2 warning signs for Alaris Equity Partners Income Trust (of which 1 is a bit concerning!) that you should know about in order to have a holistic understanding of the stock.
Important note: Alaris Equity Partners Income Trust 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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