Here's Why Some Shareholders May Not Be Too Generous With Solution Financial Inc.'s (TSE:SFI) CEO Compensation This Year

Key Insights

• Solution Financial's Annual General Meeting to take place on 27th of March
• Total pay for CEO Bryan Pang includes CA$190.8k salary
• The overall pay is 71% below the industry average
• Solution Financial's three-year loss to shareholders was 26% while its EPS was down 36% over the past three years

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The disappointing performance at Solution Financial Inc. (TSE:SFI) 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 27th of March. From our analysis below, we think CEO compensation looks appropriate for now.

See our latest analysis for Solution Financial

Comparing Solution Financial Inc.'s CEO Compensation With The Industry

According to our data, Solution Financial Inc. has a market capitalization of CA$25m, and paid its CEO total annual compensation worth CA$191k over the year to October 2024. We note that's an increase of 32% above last year. It is worth noting that the CEO compensation consists entirely of the salary, worth CA$191k.

In comparison with other companies in the Canadian Diversified Financial industry with market capitalizations under CA$286m, the reported median total CEO compensation was CA$668k. In other words, Solution Financial pays its CEO lower than the industry median. What's more, Bryan Pang holds CA$15m worth of shares in the company in their own name, indicating that they have a lot of skin in the game.

Talking in terms of the industry, salary represented approximately 44% of total compensation out of all the companies we analyzed, while other remuneration made up 56% of the pie. On a company level, Solution Financial prefers to reward its CEO through a salary, opting not to pay Bryan Pang through non-salary benefits. 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.

Solution Financial Inc.'s Growth

Over the last three years, Solution Financial Inc. has shrunk its earnings per share by 36% per year. Its revenue is down 7.7% over the previous year.

Few shareholders would be pleased to read that EPS have declined. This is compounded by the fact revenue is actually down on last year. These factors suggest that the business performance wouldn't really justify a high pay packet for the CEO. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Solution Financial Inc. Been A Good Investment?

Since shareholders would have lost about 26% over three years, some Solution Financial Inc. investors would surely be feeling negative emotions. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

Solution Financial pays CEO compensation exclusively through a salary, with non-salary compensation completely ignored. 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.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. We did our research and identified 4 warning signs (and 3 which are significant) in Solution Financial we think you should know about.

Switching gears from Solution Financial, if you're hunting for a pristine balance sheet and premium returns, this free list of high return, low debt companies is a great place to look.

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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.