We Think Currency Exchange International, Corp.'s (TSE:CXI) CEO Compensation Package Needs To Be Put Under A Microscope

The results at Currency Exchange International, Corp. (TSE:CXI) have been quite disappointing recently and CEO Randolph Pinna bears some responsibility for this. Shareholders can take the chance to hold the board and management accountable for the unsatisfactory performance at the next AGM on 17 March 2021. This will be also be a chance where they can challenge the board on company direction and vote on resolutions such as executive remuneration. We present the case why we think CEO compensation is out of sync with company performance.

View our latest analysis for Currency Exchange International

How Does Total Compensation For Randolph Pinna Compare With Other Companies In The Industry?

At the time of writing, our data shows that Currency Exchange International, Corp. has a market capitalization of CA$73m, and reported total annual CEO compensation of US$425k for the year to October 2020. That's a notable decrease of 23% on last year. Notably, the salary which is US$325.0k, represents most of the total compensation being paid.

For comparison, other companies in the industry with market capitalizations below CA$253m, reported a median total CEO compensation of US$388k. So it looks like Currency Exchange International compensates Randolph Pinna in line with the median for the industry. What's more, Randolph Pinna holds CA$16m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Component	2020	2019	Proportion (2020)
Salary	US$325k	US$325k	76%
Other	US$100k	US$231k	24%
Total Compensation	US$425k	US$556k	100%

On an industry level, roughly 22% of total compensation represents salary and 78% is other remuneration. According to our research, Currency Exchange International has allocated a higher percentage of pay to salary in comparison to the wider 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.

Currency Exchange International, Corp.'s Growth

Currency Exchange International, Corp. has reduced its earnings per share by 80% a year over the last three years. In the last year, its revenue is down 40%.

Overall this is not a very positive result for shareholders. This is compounded by the fact revenue is actually down on last year. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Currency Exchange International, Corp. Been A Good Investment?

The return of -54% over three years would not have pleased Currency Exchange International, Corp. shareholders. So shareholders would probably want the company to be less generous with CEO compensation.

In Summary...

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, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

CEO compensation can have a massive impact on performance, but it's just one element. That's why we did some digging and identified 1 warning sign for Currency Exchange International that you should be aware of before investing.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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