Todd Hudson has been the CEO of Axis Auto Finance Inc. (CVE:AXIS) since 2018, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also evaluate the appropriateness of CEO compensation when taking into account the earnings and shareholder returns of the company.
Check out our latest analysis for Axis Auto Finance
How Does Total Compensation For Todd Hudson Compare With Other Companies In The Industry?
Our data indicates that Axis Auto Finance Inc. has a market capitalization of CA$31m, and total annual CEO compensation was reported as CA$443k for the year to June 2020. We note that's an increase of 14% above last year. We note that the salary portion, which stands at CA$360.6k constitutes the majority of total compensation received by the CEO.
On comparing similar-sized companies in the industry with market capitalizations below CA$255m, we found that the median total CEO compensation was CA$709k. In other words, Axis Auto Finance pays its CEO lower than the industry median. What's more, Todd Hudson holds CA$2.5m 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 | CA$361k | CA$307k | 81% |
| Other | CA$82k | CA$81k | 19% |
| Total Compensation | CA$443k | CA$388k | 100% |
Talking in terms of the industry, salary represented approximately 19% of total compensation out of all the companies we analyzed, while other remuneration made up 81% of the pie. It's interesting to note that Axis Auto Finance pays out a greater portion of remuneration through salary, compared to the 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 Axis Auto Finance Inc.'s Growth Numbers
Axis Auto Finance Inc. has seen its earnings per share (EPS) increase by 13% a year over the past three years. It achieved revenue growth of 16% over the last year.
Shareholders would be glad to know that the company has improved itself over the last few years. It's also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Historical performance can sometimes be a good indicator on what's coming up next but if you want to peer into the company's future you might be interested in this free visualization of analyst forecasts.
Has Axis Auto Finance Inc. Been A Good Investment?
Since shareholders would have lost about 59% over three years, some Axis Auto Finance Inc. investors would surely be feeling negative emotions. So shareholders would probably want the company to be lessto generous with CEO compensation.
In Summary...
As we touched on above, Axis Auto Finance Inc. is currently paying its CEO below the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. However, the EPS growth over three years is certainly impressive. It's tough to criticize CEO compensation when the per-share EPS movement is positive. But we believe shareholders would want to see healthier returns before the CEO gets a raise.
It is always advisable to analyse CEO pay, along with performing a thorough analysis of the company's key performance areas. We identified 4 warning signs for Axis Auto Finance (1 shouldn't be ignored!) that you should be aware of before investing here.
Switching gears from Axis Auto Finance, 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. 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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About TSX:AXIS
Axis Auto Finance
A financial technology lender, provides alternative used vehicle financing to consumers.
Adequate balance sheet slight.
